From neighbourhood bakeries to boutique gyms and heritage eateries, many small businesses in Singapore are struggling with sharp rental increases. Some report hikes of 15–50 per cent when renewing leases, with rent alone taking up nearly **half of total operating costs**. 

How Rising Rents Are Hitting the Ground

Recent stories shared in the media and on social platforms paint a consistent picture: 

• A bakery owner facing a 15% rent hike on a S$5,000/month lease decides to sell the business rather than renew, as rent already accounts for ~50% of his expenses.
• A patisserie reports a 57% jump in rent, from S$5,400 to S$8,500, and chooses to move out instead of absorbing the increase.
• Some shophouse stretches see multiple long-time tenants closing within months because new asking rents are simply out of reach. 

For many SMEs, especially F&B and retail, labour, ingredients and utilities are also rising. When rental spikes come on top of everything else, the business becomes unsustainable.

Why This Matters Beyond Individual Shops

1. Loss of Neighbourhood Character

When independent brands are priced out, they are often replaced by chains or overseas concepts which can pay more. Over time, heartland and heritage areas risk losing the diversity and “soul” that make them attractive to residents and tourists. 

2. Pressure on Jobs & Entrepreneurship

High rentals discourage experimentation and risk-taking. Fewer people are willing to open bakeries, cafés, gyms or studios if they can be wiped out by one steep renewal.

3. Consumer Prices

Even if landlords insist rent is “not the main factor”, businesses under pressure often have little choice but to raise prices, cut quality, or both.

Arguments for Letting the Market Decide

Some argue that the Government should not interfere too much with private rental negotiations: 

• Property owners and tenants should be free to agree on prices.
• If rents are truly too high, tenants will leave and landlords will eventually have to lower rents.
• Heavy intervention could distort property values, impact REITs and reduce Singapore’s attractiveness as an investment destination.

In this view, high rents are part of market discipline — only the strongest or most productive businesses survive.

Arguments for Doing More

On the other side, many small business owners and advocacy groups say the playing field is imbalanced: 

• Landlords often have more negotiating power and deeper pockets than small tenants.
• There is limited transparency on comparable rentals in some segments, making it hard for SMEs to judge if they are paying “fair rent”.
• Some landlords benchmark rents to the highest bidder, not to sustainable local demand, leading to overshooting.

They worry that leaving everything to the market may hollow out local businesses, especially in conservation areas and heartland clusters.

What Can Government Realistically Do?

1. Strengthen Fair Tenancy Frameworks

Singapore already has a Code of Conduct for Leasing of Retail Premises, but SMEs argue that compliance and enforcement can be improved. Possible measures include:

• Clearer guidelines on rent review mechanisms and notice periods
• Discouraging one-sided clauses (e.g. unilateral early termination rights)
• Stronger dispute resolution channels outside of expensive court processes

2. Improve Data Transparency

One way to empower tenants is to provide more transparent data on commercial rents by area and property type. This helps SMEs benchmark offers and negotiate more fairly.

3. Use Public Sector as a Role Model Landlord

Government-linked landlords can set the tone by:

• Exploring turnover-based rent models with base rent + profit-sharing, especially for F&B and retail. 
• Rewarding long-term tenants that contribute to the precinct’s character.
• Balancing short-term rent maximisation with long-term ecosystem health.

4. Targeted Support for Vulnerable Sectors

Instead of broad subsidies, support could be more targeted:

• Time-limited grants for heritage brands or community-serving businesses in certain precincts
• Advisory support on lease negotiation and location strategy
• Support for SMEs to move online or adopt hybrid business models

What Can Small Businesses Do Now?

• Negotiate actively: Show landlords real P&L numbers, market conditions, and how your business drives footfall.
• Consider alternative locations: Emerging neighbourhoods or upper-floor units may offer better sustainability than “trophy addresses”.
• Diversify revenue: Add online sales, delivery, classes or subscriptions to reduce dependence on walk-in traffic.
• Join tenant associations: Collective voices can push for better standards and data transparency.

So… Should the Govt Do More?

There is no simple yes/no answer. Too much intervention can distort markets, but too little may hollow out local entrepreneurship. The sweet spot likely lies in:

• Stronger fair-tenancy norms
• Better data & transparency
• Role-model behaviour from public landlords
• Targeted support for sectors that matter to Singapore’s identity and everyday life

For now, the debate continues — and every lease renewal, shop closure or rent hike adds another voice to the conversation about what kind of city Singapore wants to be for its small businesses.