Thursday, May 14, 2015

The Business Times : Retail shakeout in Tiong Bahru

The Business Times
By Debbie Yong
14th May 2015

URA cracks down on those that use residential ground floor units for commercial purpose following complaints from the neighbourhood's residents

With rapid gentrification came a voracious demand for commercial space, luring many to lease ground floor residences under home office and showroom licences for use as retail shops. 

THEY came, they injected fresh buzz to a sleepy neighbourhood and now, they're being given the boot.

After years of flying under the radar, several businesses in Tiong Bahru estate have been asked to vacate their premises by the Urban Redevelopment Authority over the last two months, following complaints from the neighbourhood's residents.

The businesses were found to have been using residential ground floor units for commercial purpose, and were given one month to cease doing so or face enforcement action under the Planning Act, according to notices posted outside the units by the URA.

Among the businesses affected by URA's recent actions are a handful of startups and design agencies, homeware shop and studio Bloesem, apparel retailer Nana and Bird, and decade-old nail parlour and spa Hui Aesthetics, which had just spent S$30,000 to spruce up its rented unit last June.

Comprising a network of conserved low-rise housing blocks built in the 1940s and 1950s, Tiong Bahru has been undergoing a renaissance among youths, expatriates and tourists in the last five years. But with rapid gentrification also came a voracious demand for more commercial space, luring many new businesses to lease ground floor residences under home office and showroom licences for use as retail shops.

One business owner, who had to prematurely terminate the leases on two shop units, said that she received a warning letter from the URA a month ago, followed by a site inspection by several police officers last week. She vacated the units the following day.

"It was intimidating. I'm not a criminal - we're just trying to bring beautiful objects to the neighbourhood," she said.

Another affected retailer, who has been featured in several newspaper articles and guidebooks on Singapore since setting up shop in 2011, said that her two appeals to the authorities for an extension of the grace period to the end of her lease in July were both rejected. The sudden news and short notice period is particularly damaging for a small business, she said: "We're in Tiong Bahru because we can't afford to be in a shopping mall, and I'm now scrambling to find a new space, while getting in contractors to reinstate the current unit and negotiating with the landlord on terminating our lease."

When contacted, a URA spokesman said that the matter was brought to their attention by residents, and that the operators of these unauthorised commercial uses did not seek planning approval before starting, rendering them illegal. "As the premises are intended to be used for residential purposes and the uses have created disamenity to the neighbourhood, we have taken enforcement action on them."

But one retailer, who was told by the URA that residents had complained about the consequent increase in vehicular traffic, said that her store draws only 5-8 walk-in customers on weekdays, and up to 20 on weekends - a far cry from the crowds that patronise the area's many licensed eateries. More gravely, some licensed businesses have flouted conservation rules by completely augmenting the facades of the conservation units, while she had retained much of her unit's original form.

This isn't the first time that tensions have arisen between residents and new businesses in Tiong Bahru. Residents have repeatedly complained about the excessive noise, traffic pollution and the displacement of heritage trades by Western-leaning businesses that don't serve the needs of the area's aged inhabitants. The estate was also plagued by a prolonged rat infestation in 2013, which many blamed on the doubling in the number of neighbourhood eateries to about 30 over the last five years.

The URA and Housing Board have since been turning down some new applications to turn shop premises into eateries in recent years.

Tan Chiew Ling, co-owner of Nana and Bird, feels that better change can be enacted through dialogue. "If Singapore wants to champion local businesses and creativity, it cannot be done via a top-down approach and without a platform for discussion. We hope that residents and business owners can be brought together to tackle complaints, find solutions and discuss better ways to happily co-exist."

Chris Hooi, chairman of a residential task force convened in 2013 by the area's Member of Parliament Indranee Rajah, said that while some progress has been made, "it will take a while to facilitate a balance between the two sides". "Tiong Bahru is not a new estate where you can easily plug in new things, like new carparks and large refuse centres."

Pino de Giosa, an antique dealer drawn to Tiong Bahru's distinctly local yet genteel vibe, hoped that the authorities would allow a "limited spectrum" of non-intrusive businesses, such as art galleries and boutique concepts, to operate within residential units, rather than adhere to a blanket rule.

Other business owners, however, hoped for more consistency in the URA's enforcement of its zoning and licensing rules.

According to the URA website, property owners may apply for a change of use for their properties, but approvals will be assessed against the zoning rules in the URA's 2014 Masterplan and should "not cause any inconvenience or disturbance to the community in the area".

Ground floor residential units in Tiong Bahru range from 800 sq ft to 1,400 sq ft and typically command sales prices of S$1.2 million to S$1.8 million or some S$6,000 in monthly rental - a 50 per cent premium over upper floor units. Commercial units, particularly those approved for F&B use, can go for double.

As to whether the exodus of these unlicensed businesses will dent the neighbourhood's appeal, SLP international executive director Nicholas Mak said that it would depend on two factors: the number of shops affected, and the size of their following.

The general increase in rents and sale prices in the area is due to many other factors, such as its popular wet market and food centre and its proximity to the MRT network and the central business district, he said. "In the end, it is the authorised businesses that are really giving the revamped Tiong Bahru its current flavour, not just the unauthorised."

Recalling a similar phenomenon where errant property agents would market industrial units for commercial use some years back, Mr Mak further cautioned potential tenants of commercial units to do their relevant checks with authorities on their appropriate use before signing on a lease. "Tenants should not go in blindly, landlords should be aware and agents should not misrepresent. The three parties need to share some responsibility."

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