On 9 June 2025, Ervin Yeo, Chief Strategy Officer of CapitaLand Group, published a detailed LinkedIn post addressing growing concerns over rising retail rents in Singapore.
His post responded to mounting calls from small business owners and members of the public for policy reforms, including rent caps and stricter controls on foreign ownership of commercial properties.
Yeo’s remarks sparked a robust exchange among business leaders and political figures, including GE2025 independent candidate Jeremy Tan and Metro department store chain CEO Erwin Wuysang-Oei, both of whom offered their perspectives on the ongoing debate.
These comments reflected a shared concern over the burden rising commercial rents place on small and medium-sized enterprises. They criticised reductive explanations, instead pointing to broader structural issues including speculative land acquisitions.
Several comments also questioned the reliability of existing indicators such as Occupancy Cost in accurately capturing the financial pressures faced by retailers. Many called for a fundamental review of Singapore’s current rental policy framework.
Others stressed the need for greater alignment between landlords and tenants, advocating for an ecosystem-based model that includes shared key performance indicators, integrated loyalty programmes, and co-created marketing strategies aimed at ensuring sustainable success across the retail sector.
Yeo cautions against rent control, calls for flexible policies to support retail
In his post, titled “Put down the pitchforks for a moment and hear me out: Perspectives on Singapore Retail,” Yeo cautioned against rent control policies.
He compared the outcome of rent suppression to that of hawker centres, noting that artificially low rents often result in erratic operating hours, ultimately eroding customer trust and reliability.
“The flip side of rent control or pure turnover-tied rent is what we see in rent-controlled hawker centres—rents may be just a few hundred dollars, so stallholders open as and when they feel like it,” he said.
Yeo added that vacancy taxes would likely have limited impact, as most landlords are already incentivised to lease units swiftly due to mortgage obligations.
He also autioned against protectionist policies that implicitly target Chinese brands, noting that Western entrants often face less scrutiny.
He highlighted the rapid, efficient scaling of Chinese retail and F&B chains, driven by centralised logistics and the pursuit of minimum efficient scale.
Urging Singapore to retain ‘bring it on’ mentality, Yeo advocated maintaining an open, competitive ethos to raise industry standards.
Yeo calls for development charge relief and strategic flexibility
Instead of rent controls, Yeo proposed a temporary reduction in the Development Charge (DC) as a means to support urban rejuvenation.
He cited escalating land costs, high interest rates, and a maturing economy as key structural pressures facing the retail sector.
Yeo argued that rent is a downstream effect of land values, noting that land now accounts for 70% of total development costs—up significantly from just 4% in the 1980s.
Yeo urged for a more strategic and less reactionary narrative, asserting that Singapore remains an attractive and resilient investment destination.
He also pointed out that retail rents in Singapore remain below pre-pandemic levels, with URA data showing declines of over 22% in central and suburban regions from 4Q2019 to 1Q2024.
He suggested that Occupancy Cost (OC) as an “efficiency measure and a proxy for rent affordability”, noting that average OCs for CapitaLand and Frasers REIT malls in 2024 were sustainable at 17.1% and 16% respectively.
Yeo also explained that retail sales have grown faster than rents since 2018, benefiting tenants on fixed leases during the post-Covid recovery.
On rental reversion, he clarified that CICT’s 8.8% reversion in 2024 reflects gradual increases in a subset of leases, far from the steep hikes seen in individually owned properties.
Jeremy Tan frames rental pressure as a case of ‘classic landlordism’
In the post’s comments section, a number of responses raised questions about the adequacy of Occupancy Cost (OC) as a metric for rental fairness.
Jeremy Tan expressed scepticism towards OC, which calculates rent as a percentage of sales.
Tan argued that OC figures favour larger businesses and anchor tenants, skewing the average and overlooking expenses like renovations and retail fit-outs.
He also criticised the way GST hikes and increased yields are rapidly passed on through rental pricing, attributing this to policy shortfalls rather than landlord decisions.
Calling the system an example of “classic landlordism,” Tan posed a provocative question: “Does the government want to build more HDB commercial real estate that encourages entrepreneurship at a lower cost?”
In reply, Yeo clarified that the OC data he referenced is based on publicly disclosed figures and remains lower than pre-COVID benchmarks across several trade categories.
He reiterated that managed mall rents include service offerings, in contrast with strata-titled properties where rents are primarily pocketed by individual owners.
Yeo further explained that rental pricing must reflect underlying capital values and land prices, calling for a nuanced conversation on land revenue frameworks.
Land pricing and inflationary pressures
Meanwhile Dominic Ang, CFO of Viva Foundation for Children with Cancer, argued that a stable OC ratio does not necessarily indicate a sustainable rental environment, as businesses may simply be passing rental increases to consumers, fuelling inflation without actual growth in footfall or customer base.
He highlighted that rent is ultimately driven by escalating land prices, and questioned how the government could moderate land costs in a land-scarce city-state like Singapore.
In response, Ervin Yeo agreed that upstream land prices are the root issue, adding that any meaningful analysis must compare real versus nominal rent growth, where real rent increases tend to lag over time due to inflation.
Metro CEO calls for partnership over pitchforks
Erwin Wuysang-Oei, CEO of Metro department store, responded with a tenant-centric perspective, emphasising the need for stronger alignment between mall operators and retailers.
Wuysang-Oei acknowledged financial pressures faced by landlords but pointed out that not all retail formats share the same cost structures.
He advocated for rent models that allow for ramp-up periods, especially for innovative or niche concepts that require time to build momentum and drive customer engagement.
He also highlighted manpower shortages as a shared industry issue and recommended joint solutions like shared staffing and upskilling initiatives.
Urging a shift towards an ecosystem-based approach, Wuysang-Oei proposed shared KPIs, integrated loyalty schemes, and co-created marketing to drive mutual success in the evolving retail landscape.
Social impact and inclusivity amid rising rents
Progress Singapore Party volunteer Stella Stan Lee highlighted another concern: rising rents pushing out socially meaningful enterprises like music studios or elder care centres.
She called for a broader consideration of societal impact in retail planning, not just financial outcomes.
Yeo responded by acknowledging this idealism, urging stakeholders to view rental costs within the context of bundled services—comparing mall tenancy to the value-added living experience of a condominium over a shophouse.
He added that vibrant retail districts like Tiong Bahru or Joo Chiat demonstrate how tenant participation in the local “vibe” plays a key role, whereas places like Holland Village have struggled to sustain similar cultural vitality.
Concerns about cost pressures for small, independent retailers
Anson Tan, a human resources executive, welcomed Yeo’s intervention but warned that average OC figures often conceal the acute struggles faced by smaller businesses.
He contended that tenants should not be penalised for landlords’ speculative land purchases, questioning whether rising footfall truly translates into higher revenue.
Tan also noted that volatility in the food and beverage sector—often cited as evidence of market dynamism—is frequently a symptom of high pressure and frequent churn.
Yeo responded by saying his intention was to foster constructive discourse, not to dismiss valid concerns.
He explained that rental strategies across CapitaLand’s portfolio aim to balance diverse tenants, likening the approach to a well-rounded “economy rice” meal where balance, not excess, creates long-term value.
While Tan acknowledged the theoretical value of trade mix strategies, he expressed concern that market pressures increasingly favour deep-pocketed brands over small, distinctive operators.
He warned that Singapore risks losing the cultural uniqueness of its retail environment if smaller players are crowded out.
Call for transparency on total tenancy costs beyond base rent
Former F&B operator Kai Gwee added that tenancy costs go well beyond base rental figures.
He pointed to often-overlooked fees including Gross Turnover (GTO) rent, advertising and promotion (A&P) levies, service charges, and pre-opening costs such as licensing and shopfront design approvals.
Gwee asked whether these ancillary costs are reflected in the OC figures often cited in industry discussions.
Yeo clarified that OC calculations typically include fixed rent and GTO components, but exclude A&P and service charges as these are not technically “rent”.
He defended these fees as standard features of managed malls that help fund shared infrastructure and services, drawing a comparison between mall operations and shared condo living.
Both agreed that greater transparency is needed around these components to help new entrants make informed, sustainable business decisions.
The post Ervin Yeo’s rent comments spark wider debate on policy gaps and landlord-tenant alignment appeared first on The Online Citizen.
