Syed Harun Alhabsyi on shop rentals in heritage precincts like Kampong Glam

Parliamentary Questions Regarding Retail Rents & Heritage Businesses in Singapore

Key Concepts:

• URRA: Urban Redevelopment Authority – Singapore’s land use planning and conservation authority.
• ABSDA/SSD: Additional Buyer’s Stamp Duty/Seller’s Stamp Duty – Property taxes.
• SG Heritage Business Scheme: National Heritage Board scheme to recognize and support heritage businesses.
• Wakaf Land: Land designated for charitable or religious purposes under Islamic law.
• Inter-agency Task Force: A government body comprising multiple agencies to address specific issues.
• Nominal GDP Growth: The growth rate of an economy measured in current prices.
• Shophouses: Traditional two- or three-story buildings with commercial frontage and residential upper floors, common in historic districts.

I. Overview of Retail Rent Situation

The government closely monitors retail rents across Singapore, as reported by the URRA. Median rents in historic districts – Kampong Glam, Little India, and Chinatown – have increased moderately, around 2% per annum over the past two years. These increases are comparable to those in conventional retail spaces in the central area and are lower than the nominal GDP growth during the same period. The data is based on comprehensive rental records submitted for stamp duty purposes. While the median rents show moderate increases, a small proportion of leases (signed between 2023-2025) experienced increases of 25% or higher, particularly on streets with high footfall like Haji Lane and Bali Lane in Kampong Glam. These higher increases often reflect normalization from previously below-market rates. Despite these increases, rental rates in these areas remain 20-60% below those in the central area.

II. Closure of Warong Nasi Paraman & Government Support

The recent closure of Warong Nasi Paraman in Kampong Glam prompted public concern. The family representing the business clarified that the closure was not due to rental issues, a point the government emphasized to avoid misattribution. However, acknowledging the sadness surrounding the closure, agencies are in contact with Warong Nasi Paraman to explore potential support for their continuation should they desire it. The government is committed to supporting heritage businesses through the Inter-Agency Task Force for Heritage Businesses, Traditional Activities and Cultural Life.

III. Initiatives for Heritage Business Support

The National Heritage Board’s (NHB) SG Heritage Business Scheme provides marketing and business consultancy support to designated heritage businesses. Currently, 42 businesses are designated under the scheme, including 21 in Kampong Glam and Chinatown. The NHB’s Organization Transformation Grant assists heritage businesses in adopting innovative projects for long-term viability. The URRA also collaborates with local business associations to curate and support businesses that contribute to the unique identity of historic districts. This requires a “whole-of-government” approach involving the Ministry of National Development (MND), the Ministry of Culture, Community and Youth (MCCY), and the URRA.

IV. Addressing Stakeholder Interests & Defining "Heritage Business"

Recognizing the diverse interests of tenants, landlords, the public, and heritage groups, the government is working to coordinate efforts across agencies (MND, MTI, National Arts Council, NHB, URRA) to:

1. Identify what qualifies as a heritage business.
2. List available options to balance stakeholder interests. This acknowledges the tension between landlords seeking higher rents and tenants/heritage advocates prioritizing affordability and preservation.

V. Supplementary Questions & Government Responses

• ABSD/SSD Extension: The government currently has no plans to extend the Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) to commercial properties in heritage districts.
• Property Tax Incentives: There are also no current plans to change property tax calculations to incentivize landlords to lower rents or maintain heritage character.
• Wakaf Land & Kampong Glam: The Minister deferred answering questions specifically about Wakaf land and plans to work with Waris Investments, stating it fell outside the scope of the current parliamentary questions.
• Business Incubation & Tenant Mix: The URRA implements controls to exclude non-heritage users (fast food, supermarkets, new bars) and limit the number of souvenir shops in core heritage areas to maintain the district’s character. The delineation of district boundaries and activities are also under consideration for potential expansion and enhancement.
• Support for Younger Brands: The government recognizes the role of younger brands in enlivening heritage districts and supports initiatives like the Ramadan bazaar (in partnership with the Kong Glam Alliance) and Chinese New Year festive fairs (with local communities and trade associations).
• Proactive Support for Businesses: The government intends to work with alliances (like the Kong Glam Alliance) and business centers to proactively identify issues faced by businesses (rental, manpower, etc.) and provide support before they reach a critical point. The SG Heritage Business Scheme offers marketing and consulting support.

VI. Notable Quotes

• “Indeed when it comes to heritage businesses where there’s so much character as well as value that it brings to society when one closes it really hits the heart quite strongly…” – SPS Dr. S. Harun, emphasizing the emotional impact of heritage business closures.
• “It takes an entire village to be able to raise the the awareness on heritage and its value for our society.” – SPS Dr. S. Harun, highlighting the need for collaborative effort.

VII. Data & Statistics

• Rental Increase: Median retail rents in historic districts increased by approximately 2% per annum over the past two years.
• Rental Comparison: Rental rates in historic districts remain 20-60% below those in the central area.
• Higher Rental Increases: A small proportion of leases (2023-2025) saw increases of 25% or higher, primarily on high-footfall streets.
• SG Heritage Business Scheme: 42 businesses designated under the scheme, including 21 in Kampong Glam and Chinatown.

Conclusion:

The government acknowledges the importance of preserving heritage businesses in Singapore’s historic districts while navigating the complexities of market forces. Current strategies focus on monitoring rents, providing targeted support through schemes like the SG Heritage Business Scheme, fostering collaboration between agencies and stakeholders, and implementing controls to maintain the unique character of these areas. While no immediate changes to property taxes or stamp duties are planned, the government remains committed to a proactive and collaborative approach to ensure the long-term viability of heritage businesses and the preservation of Singapore’s cultural identity.