RENTS GO UP, SHOPS MOVE

The Electric New Paper :

RENTS GO UP, SHOPS MOVE
FORGET the red-light district.

By Hedy Khoo


12 May 2008

FORGET the red-light district.

The way rents are going, Geylang is now the red-hot district.

The demand for properties between Lorong 1 and 25 is so hot that rents have shot up, and some long-time businesses are being forced to move out.

One such casualty is the famous Tanjong Rhu Pau.

It had to give up its lease for its Lorong 21 corner unit because the landlord more than tripled the monthly rent, from $9,000 to $30,000.

Said the boss of Tanjong Rhu Pau, Mr Yap Peng Wah, 62: 'We had to move. We had no choice.'

The increase meant an additional monthly expenditure of $21,000 on the 1,600 sq ft unit.

'We would not be able to sustain our business with such high overheads,' said Mr Yap.

He explained that his manpower costs are high as he has to employ more than 10 employees to make the buns and pastries by hand.

'Even with a rent between $10,000 and $20,000, the business would not be profitable,' he added.

So Mr Yap moved to another 1,600-sq-ft unit, at the corner of Guillemard Road and Lorong 34.

His rent there? Just $4,500.

'The rent here is half of what I paid previously, but business has dipped by about 30 per cent,' he said.

'Some of our old customers happen to drive by here and spot us. Most say they were wondering where we had moved to.

'The only good thing is this part of Geylang is less complicated.'

MISTAKEN FOR PROSTITUTES

His partner, Mr Lee Kwang Hua, 52, said: 'At our previous location, we lost some female customers, because they complained that some men mistook them for prostitutes when they come to our shop.'

Still, Mr Yap had hoped to relocate within the same part of Geylang initially.

'It was impossible to find a unit in the same area because the prices kept climbing,' he said.

'It's a landlord's market there because many businessmen want to open coffeeshops in the stretch between Lorongs 6 and 25.'

Mr Yap attributes the property boom along this stretch partly to the active night life.

'The general property boom did push up the property prices, but here in Geylang it is also because of the presence of the women,' he said.

'A lot of businesses want to open coffeeshops here because there is so much human traffic. The retirees come from all over Singapore to look at the girls and hang out at the coffeeshops.

'Without them, the coffee-shop businesses would collapse,' he commented.

He cited the example of a coffee shop on Lorong 23.

'Between 1997 and 1999, the coffee shop changed ownership because the business was poor,' he said.

'But once the China girls appeared in the area around 2000, all the men came, and now the business there is booming.'

Yong He Eating House, a favourite haunt among foodies, also had to move out because of the sky-rocketing rent.

The eatery, which has been selling its Taiwanese soya beancurd and youtiao in Geylang for the last decade, moved to a Lorong 27A corner unit in January.

$20,000 TO $40,000

Mr Dong Rong, 50, the boss of the eatery, said his landlord at the original location near Lorong 9 had wanted to double the rent from $20,000 to $40,000. The lease for the 2,200 sq ft unit expired last December.

He now pays $28,000 a month for a 3,600 sq ft unit.

'The property market boom is the main reason, but the China girls also played a part in driving up business in the area,' he said in Mandarin.

'There was a scramble to open coffee shops to catch the business from the men who come to Geylang to look at the girls and chat them up.

'It doesn't cost much to drink a coffee or have a beer and they can sit there all day to look at the girls and make friends with them.'

But while the coffee shops thrived on the constant flow of business from male customers who flock to Geylang to gawk at the prostitutes, it did little to boost his business.

He said: 'Our customer base is different, we attract locals and tourists who come here for our Taiwanese snacks.'

PARKING PROBLEM

Indeed, he felt the volume of traffic in this part of Geylang was not too good for his business.

'Too many cars, and there is always a traffic jam. Many of our customers complained that they could not find parking in the area, so they would stay away,' he said.

He finds his new location better, as parking is less of a problem for customers.

The bigger space also suits his plan to expand his eatery into a Taiwanese food court.

'The increased rent was a blessing in disguise for us,' said Mr Dong.

'But other tenants who are still located in that stretch may have to move when their current leases expire.'

On the other side of Geylang, business tenants have not been spared the rising rents hitting the popular stretch of Geylang Road.

Near Lorong 21, along Sims Avenue, durian seller You Chee, 37, said his boss, who renewed the lease in January, is now paying $10,000 a month for the corner ground-floor shophouse.

That is almost double the previous rate of $6,000 a month.

Mr You said his boss is looking for another location, possibly out of Geylang.

'We have no choice but to move. The rent is too high. We have seen many of the other businesses move out because of the increased rent,' he said in Mandarin.

'We have been here for four years, and built up the business from scratch. I feel sad to leave this place.'