Monday, July 6, 2009

Red boxes like red packets for HDB shops

MR Daniel Cheong, 37, has an optical shop at Marine Parade Central, rented from the Housing Development Board. But he is a landlord too. For the past two years, he has been leasing the space in front of his store to a woman selling mobile phones and accessories.

Since October 2007, he has paid about $100 a month to the town council for that space, marked out as a red box, and lets it out for as much as $1,500.

Mr Cheong says the money helps pay for his own rent and utilities bill, which can go up to $12,000 a month.

His tenant, who wanted to be known only as Lynn, had her own shop nearby until the rent there bled her dry. Being able to keep her business at a fraction of its original cost has been a life-saver, says the 32-year-old. ‘As long as I don’t affect his business, I think it’s fine.’

Mr Cheong said: ‘We need only the shop space, not the outside. We’re not earning much renting out the outdoor area, we’re just trying to stay afloat and make ends meet since costs are so high.’

Heartlanders will be familiar with the red or yellow boxes that line the walkways in neighbourhood centres. Of the 20 shops in Mr Cheong’s neighbourhood, more than half have leased their outdoor space, for about $1,500 a month.

Some shops can charge as high as $3,000 a month because they front the hawker centre, for example. Not bad for a space measuring just 2m by 1m.

The result: Makeshift stalls dot neighbourhoods, selling everything from baby clothes and lingerie, to handbags and toiletries. The most familiar sight is counters selling cellphones and accessories.

But what used to be a good thing for shopkeepers has become more of a lifebelt. The recession has hit trade and shops need these tenants to help get by, they say.

However, even that source of income is hard to come by in some places: A shopkeeper in Jurong West Avenue1 only recently managed to procure a tenant selling wallets and clothes after a long dry spell. The 50-year-old, who runs a store selling religious artefacts, said in Mandarin: ‘Times are bad, so there isn’t high demand anymore.’

Also, since a clampdown on cluttering shophouse walkways, tenants are finding it hard to store their wares after hours – unless the shopowner has space indoors.

One Ghim Moh Road shopowner who sells electrical appliances thinks such stalls bring in more than just help with the rent: variety brings in the crowds.

He has 12 regular tenants, mainly retirees and housewives whose husbands have been retrenched from work. They book fixed days to come and hawk wares like clothing, lingerie and CDs.

On a few occasions, he has let the space to salesmen looking to hawk wares such as hotplates. He has even had requests from durian sellers.

‘The products I sell can’t compete with Courts and Best Denki. Besides, this estate has more elderly people. How can I make money if I don’t attract crowds?’

For some tenants, the stalls are a good way to pass the day. Madam Ti, for example, has been running a tailoring counter in the display area outside a pet shop at Marine Parade Central for the past five years. All she has is a table for her sewing machine, a counter for all the clothes and a plastic chair to sit on. ‘Business is all right and I have my regulars. It helps me pass the time,’ said the seamstress, who is in her early 60s.

But the recession has taken its toll on tenants too. Despite cheaper rent and more flexible hours – many work only half a day – people are spending less.

An Ang Mo Kio Central tenant who sells T-shirts said she used to pull in as much as $2,000 on a good day last year. Now, she barely makes a quarter of that.

There are some rules landlords have to abide by, and a particular one has them riled: Their tenants must be selling more or less the same stuff as the main shop.

Said Mr Cheong: ‘It’s a rule that really inconveniences people, and it takes away whatever little we are doing to help our businesses survive.’

A Ghim Moh shopowner selling garments said it was not practical to lease the space to a competitor. ‘If they were selling the same things as me, I wouldn’t allow it. It would hurt my business because they can afford to sell cheaper.’

Over at Tampines Central, for example, about a third of the tenants do not sell items similar to their landlords.

The Ghim Moh shopkeeper who sells electrical appliances has been fined three times, paying $300 in all for this, but remains adamant it was worth his while.

But there are shopowners wary of flouting the rules. A shopkeeper selling women’s clothing in Bukit Batok Central has repeatedly refused offers to lease her outdoor display area to people wanting to sell phones. One deterrent: The office of Jurong Town Council which conducts regular patrols is just a stone’s throw away.

Jurong West textile merchant Mr Ng, 52, has been saying no to prospective tenants too. ‘I know it’s against the by-laws and since officers patrol regularly, I don’t want to get into trouble.’

Checks are carried out by Certis Cisco officers or officers from the various town councils. While most inspections are focused on ensuring cluttered walkways do not breach fire safety regulations, other violations, such as leasing space to unrelated trades, are also picked up.

Residents, too, alert the councils if they see displays obstructing walkways.

Shopowners who have to deal with the keener competition are not too flustered.

Said a garment shopkeeper in Marine Parade: ‘We have to make sure we appeal to a different market by selling clothes of a higher quality and bring in things they don’t have, so we have more variety.’

Said Mr Harris Cheong, 28, of the phone counters sprouting up next to his phone store in Hougang: ‘We’re targeting different markets. It’s comparable between a hawker centre and a restaurant. Our customers trust we are not a ‘hit and run’ store. The only thing we lose out on in terms of pricing are the accessories. Other than that, we don’t suffer much.’

While landlord and tenant have a mutually rewarding relationship, the real beneficiaries of the red box phenomenon are the neighbourhood residents who now have cheaper choices and variety.

Student Gareth Goh, 21, who lives in Toa Payoh, said: ‘The shops add to the atmosphere…It feels more Singaporean.’

Taxi driver Tan Eng Wah, 36, agreed, adding: ‘I’ll go to a proper shop if I need something of higher quality.’

There are some rules landlords have to abide by, and one particular one has them riled: Their tenants must be selling more or less the same stuff as the main shop.

Source: Straits Times, 6 July 2009

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