Cafe owner struggles to sustain business in empty space

Mar 5, 2017

Melissa Lin

To fulfil her long-time dream of starting her own cafe, Madam Karen Tan, 43, rented a shop space in a newly opened mall in Kovan 11/2 years ago to sell coffee, pies and waffles.

Her joy soon turned to regret - on some days, she would get only one or two walk-in customers at her cafe in Space @ Kovan.

Before long, she had depleted her $50,000 investment.

A key reason for the poor footfall is that most of the strata-titled mall, whose units are owned by individual owners, is empty.

Nearly two years after the mall opened, only about a quarter of its 56 retail spaces have been leased out, with most of the storefronts plastered with "for sale/rent" signs.

"I've never, ever managed to cover my monthly rent before," said Madam Tan, who pays about $3,000 monthly for the 345 sq ft space. "I'm using my own savings (to sustain the shop) now."

She plans to wind up the business when her lease ends in August.

Such dire situations are repeated in other strata-titled malls islandwide, especially the newer ones.

At one-year-old The Promenade @ Pelikat in Hougang, less than a third of its 270 shop spaces have been taken up. Even then, not all of them are open at the same time, giving the mall an empty feel.

Madam Jenny Wong, 54, who runs a three-month-old hair salon there, said an entire week could pass without a single customer.

Over at Kensington Square in Bartley, just three of its 57 spaces appeared to be leased out, though only a Giant Express supermarket was open when The Sunday Times visited last week.

The increased supply of strata shops - at least nine strata-titled malls opened in the past few years - coincides with climbing vacancy rates in malls, as retailers grapple with challenges such as e-commerce and competition from overseas destinations.

Subsequently, rents for strata shops on the whole have fallen by some 15 to 25 per cent from 2014 to last year, and will continue to soften this year, said Mr Ong Kah Seng, director of property consultant R'ST Research.

The reason that newer malls are suffering can be traced back to the property frenzy between 2010 and 2013, he said.

Demand for strata units was fuelled by investors, following cooling measures targeted at the residential sector. They paid high prices for units and may not be willing to rent them out for a pittance now.

Melissa Lin