Singapore’s retail and food sectors continue to struggle amid rising operational costs, with soaring rents emerging as a primary concern.
The Singapore Tenants United for Fairness (SGTUFF), a cooperative representing over 700 local business owners, released a new white paper in recent weeks highlighting the urgent need for rental reforms.
The group noted that rental expenses can consume between 30 to 50 per cent of revenue for many food and beverage (F&B) and retail businesses.
Without immediate policy intervention, it warned, many small local enterprises face extinction.
Closure of over 3,000 F&B establishments in 2024
“Singapore as a whole will also be poorer off when what remains of our local shopping and dining vibrancy and sense of community gets further wiped out,” the white paper stated.
Although the Urban Redevelopment Authority reported a 0.5 per cent dip in retail rents in the first quarter of 2025, the ground reality paints a grimmer picture. An average of 450 retail outlets shuttered every month during this period.
The F&B sector has also been hit hard. A Reuters report from April noted that closures averaged 307 per month from January to April 2025, up from 254 in 2024 and about 230 per month in both 2023 and 2022.
Last year alone saw the closure of over 3,000 F&B establishments – the highest number since 2005.
Calls to rein in foreign dominance and support local retail resilience
SGTUFF’s white paper outlined several policy recommendations, among them a cap on rental lease renewals.
It also called for allocating more prime retail spaces to local businesses and introducing penalties for landlords who leave shop units vacant for more than three months.
The group further recommended measures to control market domination by deep-pocketed international or “new and foreign” entrants.
Suggestions included an additional property tax for non-local retail tenants, a reduced foreign worker quota, and higher levies on foreign labour.
It also called for more government-led efforts to release retail space to non-profit-oriented entities such as social enterprises and cooperatives.
Referencing international models for rental reform
SGTUFF chairperson Terence Yow said the proposed lease cap was inspired by international practices.
In an interview with CNA on 2 June 2025, Yow pointed to developed economies like Japan and Sweden, where rent increases are indexed to inflation or the consumer price index.
“We think that such indexing of rent renewal increases is very fair … and is a fair reflection of market conditions, rather than very arbitrary or mercenary … price increases,” he said.
While a code of conduct exists in Singapore to promote fair lease negotiations, Yow said it is inadequate. The underlying problem, he noted, lies in the short supply of prime spaces against sustained and rising demand.
Yow said SGTUFF is currently in discussions with Enterprise Singapore to explore policy responses.
“We recognise that it is a symbiotic relationship. Tenants need landlords to do well and landlords need tenants to do well,” he said.
He hopes both sides can agree on urgent short- and long-term measures in the coming months to stem business closures and market imbalance.
According to CNA, mall operator Lendlease – which manages properties like Jem and 313@somerset – stated that it supports tenants with tailored solutions, including flexible formats such as pop-up shops.
However, Yow warned of broader consequences if action is not taken. He cautioned that “copycat malls” could become the norm, disincentivising entrepreneurship and further crowding out local businesses.
“Many who have operated for 5, 10, 20, 30 years may simply disappear because it’s just not sustainable,” he said.
Online debate underscores public call for government intervention on rising commercial rents
Public sentiment reflects similar urgency. Observing the CNA Facebook page, many netizens supported SGTUFF’s call for rental legislation.
One comment noted that in Seletar Mall alone, many businesses had shuttered, driving locals to Johor Bahru for groceries.
Others called for standardised rent structures, more HDB-built retail space, and the revival of policies allowing individuals – rather than corporations – to own small retail units.
Netizens highlight overseas contrast and inequality
Some commenters drew comparisons with other countries.
One user shared, “When I travel, I see locals running their own unique shops and cafes. That diversity makes shopping and strolling fun. In Singapore, landlords take a cut when you’re successful, which kills small business.”
Another pointed out the dominance of international companies in high-end malls like The Shoppes at Marina Bay Sands, VivoCity, and Paragon.
“How many local retailers are even there? Local players are pushed into old, unfashionable malls – and once those go en bloc, it’s over.”
‘High rents cut into profits regardless of business strength’
Not all responses aligned with SGTUFF’s view. Some commenters defended the current system, stating that rents are driven by demand and supply.
“If there are no takers, landlords will drop prices,” one wrote, adding that that lower rent won’t save failing businesses, as consumer spending today hinges on price competitiveness and customer experience.
The user highlighted the growing shift towards e-commerce, where pricing and return policies draw consumer attention.
Nevertheless, several others argued that high rents cut into profits regardless of business strength. “You don’t need to be a rocket scientist to see that high rent will erode your bottom line,” one said.
Some comments connected the rental crisis to broader socioeconomic problems, with one calling it a “boiling point” and describing landlord greed as a national issue warranting punitive measures.
The user argued that the current rental system is eroding entrepreneurship, culture, and local identity.
Another raised concerns about the Family Office scheme, warning that foreign investors acquiring malls for rental profit differs starkly from investing to create local employment.
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