NEA revises rental renewal policy for hawkers to discourage excessively high tender bids

SINGAPORE: The National Environment Agency (NEA) announced on 4 November that the rental renewal policy for successful hawker tenders will be revised to mitigate excessively high tender bids.

This change, effective from the next stall tender exercise this November, aims to ensure fairer pricing for hawker stall rentals.

Under the new policy, the downward adjustment of tendered stall rentals will be staggered over a longer period rather than being implemented immediately at the first point of tenancy renewal.

Senior Minister of State for Sustainability and the Environment, Dr Koh Poh Koon, confirmed that these adjustments will apply prospectively, meaning that existing hawkers will not be affected.

Speaking at the Singapore Hawkers’ Seminar and Awards 2024, Dr Koh noted that while most bids for vacant stalls are close to the assessed market rent, a “small percentage” of bids, particularly at popular hawker centres, have been significantly higher.

He stated, “While the numbers of such bids are very small, we want to avoid such high bids becoming a norm in the future.”

In a press release, NEA highlighted that some bidders may submit high bids to secure prime stalls at preferred locations; however, it defended that such occurrences are ” not the norm.”

In July, a bid of S$10,158 was submitted for a vacant stall at Marine Parade Central Market and Food Centre, the second-highest for the unit and reportedly the highest bid for a hawker stall in six years.

Of the top five bids for the Marine Parade stall, the highest bid of S$10,680 was withdrawn, with three others exceeding S$8,000.

Revised scheme staggers rental adjustments

Previously, tendered stall rentals were adjusted down to the assessed market rent immediately after the first tenancy term, which lasts three years.

Under the revised scheme, for the second tenancy term, rentals will be adjusted downwards by 50 per cent of the difference between the tendered rent and the assessed market rent.

For example, if a hawker successfully bids S$5,000 and the assessed market rent is S$1,000, they will pay S$3,000 in rent for the second term. From the seventh year, or their third tenancy term, the rent will revert to the assessed market rent of S$1,000.

The median assessed market rent for non-subsidised market and cooked food stalls has remained relatively stable at approximately S$320 and S$1,200 per month, respectively, since 2019, according to NEA.

Assessed market rent is reviewed annually, taking into account factors such as footfall, location, government policies specific to hawker centres, and comparisons with similar establishments.

NEA further stated that stallholders whose tendered rents are lower than the assessed market rent will continue to see upward adjustments moderated by the government, which have not exceeded S$300 per tenancy term in recent years.

To assist prospective bidders in making more informed decisions, NEA plans to introduce additional resources and online business cost estimation tools in 2025.

Currently, bidders can access historical data on the five highest tender bids for each stall over the last five exercises, alongside final tender results from past exercises.

PSP NCMPs file motion seeking Government review of hawker policies

SMS Dr Koh’s announcement comes ahead of a motion set to be debated in the next parliamentary sitting from 11 to 13 November.

The motion, filed by Mr Leong Mun Wai and Ms Hazel Poa, both Non-Constituency Members of Parliament (NCMPs) from the Progress Singapore Party, calls on the government to review its policies regarding hawkers and the management of hawker centres.

On 29 October, they submitted the motion to advocate for better support for hawkers to sustain and grow Singapore’s hawker culture, ensuring that Singaporeans can continue to enjoy good and affordable hawker food.

During a September Parliamentary sitting, Dr Koh defended the assertion that high tender prices for hawker stalls are “not the norm,” highlighting that the median rent has remained stable at around S$1,250 since 2015.

He pointed out that the median successful tender price for cooked food stalls across hawker centres was approximately S$1,800 in 2023, with one in five stalls awarded at or below S$500.

He added that NEA, which manages all 120 hawker centres with over 14,000 stalls, found in a survey that rental costs account for less than 10% of stallholders’ operating expenses, while raw materials and manpower make up 56% and 20%, respectively.

Dr Koh reiterated that subletting and rent-seeking behaviour are prohibited, noting that only about 4% of cooked food stalls pay rent above the assessed market rate. For over 6,000 stallholders, rent is at or below market rates.