Sunday, February 26, 2012

The Sunday Times : Pay up or get out

26th February 2012
The Sunday Times - LifeStyle
By Kimberly Spykerman and Natasha Ann Zachariah

Rising shop rentals in Serangoon Gardens have left shopkeepers and residents wondering how long the neighbourhood can afford to keep its old-fashioned charm

Will Serangoon Gardens lose its homey charm with smaller businesses being driven out by retail chains? -- ST PHOTOS: LAU FOOK KONG
It has become the hang-out place for yuppies, expatriates from nearby international schools and the well-heeled in smart-casual attire who throng its restaurants, spas, salons and pub-lined streets.

But a quiet junction in the bustling, suburban enclave of Serangoon Gardens tells another story behind the retro charm of its quaint shops.

The intersection of Maju and Portchester Avenue has seen livelier days. Until two months ago, the lounge-bar Liquid Kitchen drew the supper crowd looking for a nightcap, and soccer fans over the weekends.

But now, the shutters are down at the six-year-old outlet after the landlord doubled the rent when the lease came up for renewal last December. The new rent at the 2,700 sq ft two-storey unit would have been $24,000, up from $12,000, LifeStyle understands.

And other outlets tell of similar woes over rent hikes too, particularly the mom-and-pop shops which are part of the area's charm. They are struggling to compete with the big boys who can afford to pay high rents.

With a new mall, myVillage, touting brand names such as Bakerzin, Shin Kushiya and Relish, as well as standalone stores for chains such as Cold Storage Gourmet, Harry's Bar and Sushi Tei, property agents say that Serangoon Gardens could be going the way of Holland Village.

Holland Village is seen by some as a victim of its own chi-chi charms. It was once home to the European population and upper-income families, who lived side by side with HDB heartlanders since the 1950s and 1960s, much like the Serangoon Gardens of the past.

In the past 20 years, crowds were drawn to the bohemian feel of the place, which had independently run cafes. Today, big chains such as Crystal Jade, BreadTalk and The Coffee Bean & Tea Leaf have moved in, capitalising on the area's popularity.

Rental for a 1,500 sq ft unit in Holland Village can start from $18,000 and can go above $20,000, depending on the location, estimates Mr Danny Han, a senior associate director with OrangeTee.

One symbol of the change is the loss of that corner staple: the coffee shop.

In Serangoon Gardens' case, it was a stark transition. In 2010, a coffee shop harking back 50 years and which had remained largely unchanged, made way for a bank.

But who could blame coffee-shop owner Loi Boon Kee. The Straits Times reported then that he bagged a deal for Citibank to lease the two-storey unit on Chartwell Drive for more than $30,000 every month. That was 40 per cent more than what he previously collected from his tenants, and at least $10,000 more than the market rate that was being paid for a similarly sized space of 3,800 sq ft.

Serangoon Gardens is not the only suburban location where rents are on the rise. It was reported last week that at one point last year, the gap between prime Orchard Road retail space and top suburban locations narrowed to its lowest level on record. In the first quarter of last year, the difference was only 97 cents a sq ft.

For some businesses such as Liquid Kitchen, the rise can be too much. 'The rent was definitely a factor in why we moved out. It was just too high,' said a senior staff member who declined to be named. The chain has another outlet in Upper Thomson Road and recently opened a smaller outfit on Neil Road.

Higher rents have also taken their toll on two-year-old Thai restaurant Por Jai, located in a prime spot opposite the area's main bus stop.

It closed shop earlier this week after the landlord upped rent by 25 per cent to $25,000 for the two floors that it let.

While that is not as big a jump as some have faced, business was poor as diners preferred the offerings at the iconic Chomp Chomp hawker centre nearby, says a manager of the family-run business, who declined to be named. The restaurant has two other outlets.

Indeed, for the past year, it had sublet the second floor and had sought a tenant to take over its ground floor unit, but received few offers. So when the rent jumped this year, it had no choice but to go.

The manager says: 'Our overheads were already too high, and our business was not enough to sustain the rent. It was just not within our budget.'

The Straits Wine Company is leasing its third unit in six years. Previously at Maju Avenue in 2005, it later moved to 68A Serangoon Garden Way, two streets away, in 2010. Just a year on, it is now moving around the corner to 80 Serangoon Garden Way by the end of next month.

While declining to mention rental figures, the company's chief executive, Ms Kathy Lim-Sheehy, says it moved the first time because the landlord wanted to double the rent. Now it is moving again from its second location as the landlord there wants to rent the ground floor and the second floor, where it is now, as a single unit and for a higher rent.

Its new location will give it direct frontage, as it is on the ground floor and rent is relatively lower.

She says: 'I really couldn't afford to take both units in the previous location. But I wanted to stay in the area as we have a good following of loyal customers.

'I don't think I'll ever be happy with the rent - it's not cheap, definitely, but it's the best that we can get, so we're going to take the risk and sign the lease.'

The trend of rising commercial rentals mirrors the increase in residential property prices in the neighbourhood. Residential property prices have more than doubled in recent years as many homeowners tear down the single-storey houses to build swanky big homes.

The retail mix is bound to mirror this change. And there is no shortage of new businesses wanting a slice of the action. Mr Mohamed Ismail, chief executive of PropNex Realty, says that the change has also been driven by the growing number of international schools in the area, such as the Australian International School and the French School of Singapore.

'With more expatriates, businesses that can cater to this market will compete for the space in Serangoon Gardens to target this community,' he adds.

The newest kid on the block is Japanese bakery Mugiya, which opened just last week. And for it, rent prices brought cheer. The shop is paying a rental of at least 30 per cent lower than its other three mall outlets. It is subletting the store from NTUC FairPrice.

A spokesman for Mugiya, who declined to give the rental amount for the 600 sq ft shop, says: 'We picked this location as it has a nice, relaxing, lifestyle vibe. Also, the crowd from the residential area is good.'

However, it is not all plain-sailing for some newcomers. Japanese restaurant and wine bar Yama Mae, which opened in August last year on the corner of 87 Serangoon Garden Way, is experiencing 'rollercoaster days', says head chef Roy Chee.

Lunch hour is often quiet, and Yama Mae, which pays about $13,000 in monthly rent for the almost 2,000 sq feet ground floor unit, relies on regulars rather than walk-ins. While it is doing all right for now, Chef Roy, 41, says that it is tough to draw in the residential crowd, as not many are willing to pay $20 to $30 for a meal.

He says: 'There are no offices in the area and many of the long-time residents here are old. They either stay home and eat or go for cheaper options or brands they know well, such as Pow Sing or Chomp Chomp.'

But the old-style, 'kampung' flavour of the area is precisely why some business owners are keen to come in or stay in the area despite rising rentals.

The older faces in the neighbourhood, some of whom have been around since the 1980s, say they are able to survive because their landlords charge them 'discounted' rates.

Borshch Steakhouse owner Peter Ho, 70, says: 'Our landlord is fair to us because we are such a long-time tenant, that's why we can stay here for so long. We have been a little affected by these new restaurants opening here, but we do all right because we have our regulars.'

The restaurant, which opened in 1988 and serves Russian and Western cuisine, is an institution in the neighbourhood. Old-fashioned dishes such as peach melba and baked alaska, an ice-cream dessert, can still be found on its menu.

Similarly, a nameless barber shop on Porchester Avenue, which is known by its location alone and which has been around for more than 20 years, is hanging on thanks to a good relationship with the landlord.

Mr Ringo Moban, 51, one of the long-time barbers there, says: 'We don't make much. But we have loyal customers, and we love the place and the people. So as long as we can afford to stay, we will stay.'

Barber Ringo Moban says the business can get by because its landlord does not charge exorbitant rent.
At least five other businesses LifeStyle spoke to say they have been paying slightly below market rate, between $1,000 and $2,000 less, due to a good relationship with the landlord. Still, there are some landlords who may be keen to cash in, seeing big-name, established companies moving in the area.

Propnex Realty property agent Elaine Leong, 43, who is currently brokering two deals for commercial spaces in the area, says: 'Many landlords would rather deal with established companies or banks because it is easier to collect rent from them.'

The current asking rent by the landlords is between $12,000 and $14,000 for a 1,400 sq ft space, up from, she estimates, between $8,000 and $10,000 from the last tenancy.

Rising rents are inevitable, and are something business owners say they have to live with. Education centre, Jan & Elly English Language School, which has been in the area since 2003, says that with rising rents island-wide, it is willing to accommodate slight increases as customers are familiar with them being there.

School founder and director Elly Sim, who also owns outlets in Rail Mall and Greenwich V in Seletar Hills, says: 'It's the same all over the island. If rent goes up by a ridiculous amount, I will consider taking my business elsewhere, maybe overseas even.'

Still, residents and visitors to Serangoon Gardens can take delight in the pockets of old charm that remain. Just opposite the shiny new mall is a tiny sundry shop that has been around for more than 50 years, selling biscuits out of old-fashioned tins, as well as all sorts of knick knacks.

Mr Koh Guan Hock, 70, who runs the shop, says that places like his are a dying breed in an area that is springing to life with fancy watering holes and brand-name shops.

'I'm lucky the regulars still come to buy from old-timers like me,' he says in Mandarin, as he sits outside his shop, peeling a tray of onions.

Mr Eric Tan, 28, who works in the hospitality industry and has lived in the area since he was a child, says that the area has lost its 'homey' feeling, and even basic services such as photo-printing and stationery shops can no longer be found.

'It's a food paradise of sorts now, but there's nothing else besides that. As a resident, I'm not really enticed by what's there now. It used to be that Gardens was a secluded place, but now, it's just crowded all the time,' he laments.


What do you think of the changes to Serangoon Gardens? Write to suntimes@sph.com.sg




Their stall made way for a bank

Mr Steven Tan (left) and his partner, Mr Lee Chin Soo, started their chicken rice business in 1983 which has since expanded into two restaurants.
Every time Mr Steven Tan walks by Citibank on Serangoon Garden Way, he feels a keen sense of loss.

After all, that was where Mr Tan, 52, and his partner, Mr Lee Chin Soo, 56, started the famous Posin Hainanese Chicken Rice in 1983 - a name that, for Serangoon Gardens residents, is synonymous with the dish.

Back then, they served up chicken rice and other roast meats from a coffee shop at the junction of Serangoon Garden Way and Chartwell Drive. With business booming, they added a restaurant along the same stretch six years later, which sold only steamed chicken rice and Peranakan cuisine.

But in 2010, Mr Tan and Mr Lee were given dismal news about their thriving business located in the coffee shop. They, along with three other stall-holders including a long-time wonton mee seller, would have to pack their bags to make way for the banking giant.

'I was so sad, I couldn't sleep for a few nights when the landlord told me,' says Mr Tan in Mandarin, adding that they were given a month to vacate the premises. 'We've been selling food there for so long, and everybody knows us, it's a pity to give up selling the roast meats,' he says.

He tried to negotiate with his landlord to rent the place, but gave up as he could not afford the asking price of more than $30,000 a month. Already, he and his partner were paying a hefty rent to keep the other restaurant going.

Fortunately, they own a two-storey unit along the same stretch that they bought 10 years ago for $2.6 million. The previous tenant, Thai Express, moved out when its lease expired a year ago, and the men moved the original Posin outlet in and began selling roast meats there.

'We bought a unit back then because we were afraid that something would happen and we might be kicked out,' he says. Because of this foresight, Mr Tan and Mr Lee's company, the Pow Sing group, now runs two restaurants in the same stretch, both of which are packed to the gills during lunch and dinner. On a Sunday, the restaurants sell about 200 chickens.

But Mr Tan says that with Citibank paying a premium to keep its space, other landlords have bumped up their rents as well. The monthly rent on the second restaurant went up by $10,000 in just two years - the largest increase the owners have faced since the eatery started in 1989. They now pay about $38,000 every month.

But he and his partner are able to keep things going because of the patronage by regular customers, says Mr Tan. As with many of the old-time eateries in the estate, their regulars have been eating their chicken rice since they were children and now often take their own families for a meal there.

'The people here are nice, and Serangoon Gardens is comfortable. I like the kampung feel of the place,' adds Mr Tan.

The businessman, who is married with two children, is sanguine about the influx of new restaurants, which have changed the face of the estate.

He feels that more options for food will draw a crowd to the area, which can only mean good news for the restaurants.

'The most important thing is that we must maintain the quality of our food,' he says. 'Then customers will keep coming back.'

Kimberly Spykerman




Sinseh's $4m goldmine

MR CHAN NGYUNG SHIN (centre, with his wife and son), who owns Chong Hoe Health Products Chinese Medical Store. -- ST PHOTOS: LAU FOOK KONG
Physician Chan Ngyung Shin knows he is sitting on a goldmine but he is not about to cash in on it anytime soon. The 61-year-old runs Serangoon Gardens stalwart, Chong Hoe Health Products Chinese Medical Store. It has been there since 1957.

Today, the little shop sits squashed between two units occupied by United Overseas Bank. When this is pointed out to him, he chuckles, mentioning briefly that the bank showed interest in taking over his shop premises when it moved into the estate many years ago, so it could have one big premise.

'But I have never even considered selling this place,' he says, gesturing fondly to the shop's cupboards crammed with herbs such as ginseng and bird's nest and rows of dried fish maw hanging from metal poles.

Back when Mr Chan's late father, Mr Chan Toh Heng, first set up the business, Serangoon Gardens was a new estate. There were no buses that traversed the area, no market, and very few stores. The elder Mr Chan chose the area because of cheap rents - between $100 and $200 a month at the time.

A few years later, in the 1960s, the business got its own premises. He bought a 1,500 sq ft unit for over $40,000, which he slowly paid off in instalments.

Today, that shop space could easily fetch more than $4 million.

The younger Mr Chan has received offers from people wanting to buy the property, but it is a slice of family history that he cannot bear to part with.

After all, he has worked there since he was about 10 years old, together with his seven siblings, helping his father after school.

It is clear that Mr Chan has a soft spot for Serangoon Gardens and is reluctant to leave. He describes the denizens of the area as 'gentle and nice' folk, and has served many of them since they were children. They are still regulars at his store.

Sometimes, he still sees the odd Englishman coming into his store to shoot the breeze over old photos about days gone by, when many British people lived in the area.

Serangoon Gardens has changed, admits Mr Chan, but still he feels there is no other enclave in Singapore that feels quite as peaceful and old-fashioned.

He hopes to keep his business, which he now runs with his wife Goh Choong Phin, 61, for as long as he can. His son, James, 29, is being groomed to take over. James, Mr Chan's middle child, who studied biomedical science and traditional Chinese medicine at Nanyang Technological University, said he hopes to continue the family business in the area.

'It would be a pity not to carry on,' he adds.

Mr Chan's family also own another unit in the area, twice the size of the one he runs. It is also a TCM store and is run by his five sisters. It was purchased in 1993 for $2.7 million.

If James eventually decides not to take over, Mr Chan says he will work at his business and keep the shop for as long as he can.

'This area is becoming so popular. I could never consider selling it because I wouldn't be able to find another unit just like it.'

Kimberly Spykerman




Korean pastor turned restaurateur

The Kim sisters, Su Jung (left) and Su Yeon, like Serangoon Gardens for its family feel.
Step into Korean restaurant Hanwoori and immediately, Korean-accented calls of 'Annyeong haseyo!' greet hungry diners.

The sister team of Ms Kim Su Yeon and Ms Kim Su Jung have been serving up food from their hometown, Seoul, for the past five months, adding to the eclectic mix at Serangoon Gardens.

They are helped by Su Jung's Korean husband, Mr Lee Seng Jin, 40, who runs the kitchen. All three are partners in the business, with Ms Su Yeon's Singaporean husband, Mr David Ng, 37, as a silent investor.

They were excited and relieved to secure a spot at 76 Serangoon Garden Way, despite the shop - which is about 1,500 sq ft - being smaller than what they originally desired.

But they had wanted the location instead of usual popular Korean food haunts such as Tanjong Pagar because they live nearby at Serangoon North Avenue 4. Business-wise, it made sense too, as there was previously no Korean restaurant in the area, says Su Yeon, 37.

The restaurant is quite a change in lifestyle for her as she was previously a church pastor in Beijing. Her sister used to work in broadcasting and her husband was a chef in a restaurant in Korea.

Another reason they are pleased with their current location is that they like its family feel. Over the sounds of K-pop music videos on the mounted television screen, Su Yeon, who has been here for about seven years, says: 'We are running a family restaurant and we wanted a place to feel like home, which is what Serangoon Gardens feels like.'

Su Yeon, who is helming a business for the first time after being a housewife since she came here, adds: 'Since we've been here, many of our customers have become friends and they always come back.'

Indeed, at each of LifeStyle's two lunchtime visits, the Kims were chatting away with customers like old friends. 'They have come so many times, they know us by name. They have become our friends,' says Su Yeon, who has a two-year-old daughter.

The eatery sells dishes from bulgogi ($14) to fried octopus ($19) and kimchi ($9 for medium and $12 for large), or seafood pancake ($12, medium, $14, large).

Su Yeon says: 'Our prices are cheaper and our portions are bigger, so maybe that's why many find that it's worth it for them to come back and eat here.'

But the good days, unlike now, were far and few between when they started out last year.

It was difficult to make the $2,000 they needed to cover operational and rent costs as they had priced their food too low. But once they reworked their business plan, the restaurant has been in the black.

The $7,000 monthly rental is currently 'within their budget', and at a good price for them, though their two-year lease agreement has provisions for increments over the years.

Su Yeon says that their business has been helped by their landlord. She says: 'Nowadays, landlords may not care about the businesses they lease out to. But our landlord understands that we are new so he supports us. If we have to charge a high price to make a higher rental, we won't make enough to pay the rent.'

Natasha Ann Zachariah

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