A hefty rental hike for Sunset Way eateries led to shock and awe. The detente that followed appeased the stayers.
The bruising war in the niche area, touted as the next Holland Village, erupted nearly three months ago.
The master tenant for the eateries, Circles International Solutions (CIS), had on June 1 raised rentals by up to 80 per cent.
At least five eateries at Block 106 in Clementi Street 12 were riled, The Sunday Times reported on June 20.
Several reacted by basically issuing an ultimatum: ‘Lower rentals or we move out.’
Now that the dust has settled, two have closed their outlets, one has changed hands, while two others have decided to stay.
Thai restaurant Yum Yum Thai and cafe bar Sunset Tavern have called it a day, while seafood restaurant Fortune Cuisine has changed owners.
‘We cannot afford the new rent,’ said Yum Yum Thai’s owner Nelson Yeo, 60, whose restaurant has been in the red since 2007.
Mr Yeo was paying about $7 per sq ft (psf) before it was increased to close to $8 psf.
Fortune Cuisine’s former owner Andrew Lian, 46, told The Sunday Times he, too, had made a loss in the past year.
‘Any increase in rent, no matter how little, will mean more losses,’ said Mr Lian.
Two of the stayers are steakhouse Grill-Out! and Megumi Japanese Restaurant – after managing to lower their rent.
Grill-Out!, hit with the highest hike of about 80 per cent – from $4,800 to $8,800 a month – got its rent substantially reduced after a few rounds of negotiations.
‘Having sunk in so much initial investment, we want to stay,’ said Ms Elicia Lim, 45, consultant for Grill-Out!.
She finds the new 12 per cent increase in the first and the second year ‘reasonable’.
The five eateries invested $150,000 to $300,000 each when they opened for business in 2007.
They set up shop at Block 106 as part of a million-dollar revamp initiated by Holland-Bukit Timah GRC and the Housing Board to model Sunset Way after Holland Village.
The HDB had paid 13 provision shops there to retire under the Restructuring Programme for Shops (RPS) scheme.
The block also benefited from another scheme, Revitalisation of Shops (ROS), which co-funds the sprucing up of shops in HDB estates to compete with malls.
Sunset Way is the only HDB-developed location to have tapped into two schemes – RPS (ended in 2007) and ROS (ongoing) – and to be let out to a master tenant.
The HDB said its objective of turning the place into a popular dining destination has been met.
‘From our records and survey, residents and retailers affirmed that Sunset Way became more vibrant after RPS,’ said a spokesman for the HDB.
But some tenants beg to differ. Rocky Pizza’s boss Dan Cooley said: ‘This place is remote and traffic is not very high. We’re not along the main road.’
Yum Yum Thai’s Mr Yeo agreed. ‘This place is still very quiet – no different from last time,’ he said.
The owner of one well-known restaurant in Dempsey Road, who declined to be named, said he would rather pay more to be at Dempsey.
‘The vibrancy at Sunset Way faded after its novelty factor wore off,’ he said.
Rentals at Sunset Way, at between $5 and $8 psf now, are only slightly below those in the more happening Dempsey Road and Tanglin Village.
Rentals at Tanglin Village range from $8 to $12 psf, while rates at Holland Village are between $10 and $30 psf.
When asked if he felt Sunset Way was ‘less happening’, CIS business development manager Victor Koh said: ‘If Sunset Way is not good, then why are all the tenancies taken up?’
Source : Sunday Times – 29 Aug 2010