Flor Patisserie made headlines after chef-owner Heidi Tan revealed in April that their Siglap Drive landlord had decided to raise rent by 57% to $8,500.
In an impassioned social media post, Tan asked policymakers “to create a fair playing ground for businesses and landlords”, suggesting a fine of 50% of the asking rent for commercial properties that have sat empty for more than six months.
Even without editorialising, the figures themselves tell a bleak story. Last year saw the start of 3,790 new F&B businesses, while 3,047 closed down, marking a 19-year high.
The current year could spell a repeat. According to data from the Accounting and Corporate Regulatory Authority, 2,333 new F&B businesses have been established as of August, and 1,724 have shuttered.
See also: Relight my fire: F&B players feel the withering heat
New data on Housing and Development Board (HDB) shop units show real cause for concern: private landlords have more than doubled rents over the past year, with the median rent for heartland shops rising from $3.51 psf in 2Q2024 to $7.34 psf in 2Q2025.
This marks a record-high rental rate for privately held HDB shops, according to the Urban Redevelopment Authority’s (URA) Realis data, which began in 1999.
Rents are a function of what the landlord has paid for the space. When strata retail units change hands, the purchaser is likely to have paid a much higher psf cost than the seller. Hence, the purchaser’s mortgage will be higher, and they will pass this to tenants by charging higher rents.
See also: Read the main cover story: For CapitaLand Integrated Commercial Trust, there’s no place like home
Sentimentality over lost haunts is not just reserved for heartland names. Chinese hotpot chain Haidilao announced in August that it would not renew its lease at CQ @ Clarke Quay at the end of the month, shutting the brand’s first overseas location after 13 years.
As of June 30, Super Hi International, the operator of Haidilao’s international business, operates 126 outlets globally.
As of Sept 1, the 1,000 sqm Clarke Quay outlet is no more. A CapitaLand Investment (CLI) spokesperson says the group will be introducing a new concept to take over the space occupied by Haidilao.
CLI is the sponsor of CapitaLand Integrated Commercial Trust (CICT), the owner of CQ @ Clarke Quay.
Haidilao, like a few other names, stayed open throughout CICT’s 20-month, $62 million asset enhancement initiative (AEI) of CQ @ Clarke Quay. When the area was relaunched in April 2024, CICT welcomed new tenants like a 14,000 sq ft FairPrice Finest and Singapore’s largest indoor dog pool.
CICT said the “repositioning” would transform Clarke Quay from a nightlife spot into a “vibrant day-and-night destination”.
A taste of home
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CICT highlighted a handful of new tenants in its Aug 5 results briefing for 1HFY2025 ended June 30, including the Singapore debuts of Taiwanese chain Spicy Noodles (located in Raffles City Singapore) and Chinese barbecue chain Xita Lao Tai Tai (Bugis+).
Bringing established foreign chains into Singapore gives the landlord peace of mind that the tenant is likely to succeed and make good on rent, while breaking the monotony of familiar brands that are already ubiquitous islandwide.
This stability also keeps CICT’s portfolio committed occupancy high. At 98.6%, the diversified REIT’s retail occupancy is higher than its integrated development (97.8%) and office (94.6%) portfolios, and higher than its overall portfolio committed occupancy (96.3%) in 1HFY2025.
This leasing model makes economic sense; it self-selects large, sustainable businesses with strong cash flow that can afford to keep up with growing rent. CICT’s Singapore retail portfolio posted a rental reversion of 7.7% in 1HFY2025.
In fact, prime monthly rent for Orchard malls recovered above pre-pandemic levels last year. According to Cushman & Wakefield data, monthly rent along Singapore’s once-famous shopping belt was $35.83 psf in 2024, above the 2019 average of $35.77 psf.
High rent may be a deterrent in itself, but keeping smaller, lesser-known businesses from the negotiating table hampers local brands that are trying to make a name for themselves.
Anecdotally, it also sets the stage for the growing dominance of Chinese F&B brands in Singapore’s malls — chains that can outbid and outlast local and regional peers.
To be fair, CICT has trialled flexible leases and pop-up stores for newer retail brands at Funan and Plaza Singapura.
In June, CICT sponsor CLI and Enterprise Singapore launched the inaugural Retail Maverick Challenge, aiming to select up to three winning local retail brands. The winners will receive rental waivers for up to one year to launch their retail concept in up to 4,000 sq ft of space in Plaza Singapura, Funan, CQ @ Clarke Quay or other CapitaLand malls.
For context, CICT signed approximately 0.8 million sq ft of new leases and renewals over 1HFY2025.
In addition, winners will also receive funding from Enterprise Singapore to cover up to half of their related costs — capped at $300,000 — for deploying tech, fitting out the store and marketing themselves, among other expenses.
Test kitchens
As Singapore’s largest landlord with 21 retail, office and integrated assets, CICT should consider working with similar government agencies and local associations to expand such initiatives to the F&B sector.
Schemes could take a soft approach, such as offering flexible leases or smaller, subdivided units in a retail mall.
The landlord could also have a greater hand in setting their potential tenants up for success by selecting chef-owners to take over a dedicated kitchen space for a limited time. This will allow budding local restaurateurs to cut their teeth — and ingredients — on a fitted-out unit without fretting about initial overheads and renovation costs.
If a public listing can be considered a significant milestone in a company’s growth, even listed F&B brands like Jumbo Seafood, Tung Lok Restaurants and Soup Holdings would not have had their start decades ago under a prohibitive rental environment.
Investors and analysts can support REITs that undertake such programmes by overlooking a few percentage points in portfolio occupancy.
Should such incubation programmes scale, REIT managers may even choose to present overall portfolio occupancy and rental reversion figures in brackets for greater transparency, separating the square footage set aside for such schemes.
In any case, REIT managers will find value in discussing such programmes under corporate social responsibility; CICT already dedicated one slide in its latest results briefing to showcase community engagements during the quarter.
The recent closure of cinema chain Cathay Cineplexes may present an opportunity for REIT managers to consider similar incubation schemes.
The exit throws up significant square footage at multiple locations, including Causeway Point and Century Square, which are owned by leading suburban retail mall owner Frasers Centrepoint Trust.
After all, finding a suitable replacement for a cinema’s relatively large space can be challenging. Close to nine months after Shaw Theatres closed its eight screens at The Seletar Mall in December 2024, the mall’s manager — Kuok Group’s Allgreen Properties — only recently put up hoarding emblazoned with HaveFun Karaoke’s branding.
The karaoke chain, operated by Catalist-listed Goodwill Entertainment, is set to open in November, nearly a year after its previous tenant departed.
National service
Returning to the data on heartland shop rents, HDB says shops leased directly by the housing board have seen rents remain largely unchanged over the past five years.
According to the HDB, there are approximately 8,500 privately held units across the island, while around 7,000 units are directly rented out by the government.
The ratio is set to change in the coming years, as the government stopped selling HDB shops in 1998, and such units typically have 30-year leases. This means the lease for the last HDB sold shop with a 30-year lease could expire in 2028.
While the overall median rent at privately held HDB shop units doubled y-o-y in 2Q2025, the average rent at F&B shops rented out directly by HDB rose moderately from $7.66 psf in 2020 to $8.12 psf in 2024.
As private landlords are increasingly replaced by REITs, the latter can afford to do more with their ample resources. It may even be a pragmatic move to secure a pipeline of potential tenants while ensuring local business owners are well-represented in Singapore’s malls.
Slides: CICT
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For CapitaLand Integrated Commercial Trust, there’s no place like home
