SINGAPORE – Street vendors who submit high bids for stalls from the November tender will no longer see their rents drop immediately to market rates after their three-year lease, as is the case now.

This is to encourage them to exercise restraint and caution in their offers.

The new initiative was announced on November 4 by the National Environment Agency (NEA) which falls under its jurisdiction. Existing street vendors will not be affected.

ST understands that around 200 market and cooked food stalls are set up for each tender. More than 6,000 cooked food stalls and over 7,000 market stalls are currently under the responsibility of the NEA.

Currently, once street vendors have paid their offering price in the form of monthly rent for the first rental term, which lasts for three years, they will have their stall rental rates adjusted to market rates, as determined by an independent evaluator.

So, street vendors in popular areas where bid prices are higher than market rates can expect their rates to drop immediately after their rental period ends.

The median market rate (AMR) for unsubsidized convenience food stalls has remained constant since 2019, at around $1,200 per month.

Under the new program, the NEA will adjust hawkers’ rent downward after the first rental period – the rent for the second rental period will be 50 percent of the difference between the offered rent and the AMR, plus the AMR.

From the third rental period, the rent will be that of the market.

For example: if the proposed rent for a stand is $5,000 and the AMR is $1,000, the stand owner will pay $5,000 for the first three years of rental, then $3,000 for the second rental duration.

The rent is then adjusted to $1,000 for the third rental term, which begins in the seventh year.

Essentially, the proposed rent will be adjusted to the LMR over a longer period, rather than at the fourth year of rental. The aim is to deter high bidding and also encourage bidders to consider longer-term business costs.

If the rent offered for a stand is lower than the AMR, the NEA will moderate the rent increase towards the AMR to help exhibitors gradually adapt. Rent increases did not exceed $300 per rental term, according to the NEA.

The agency said that today, only about 4% of ready-made food stalls in hawker centers pay rent above the AMR.

Based on successful tenders in 2023, approximately 56 percent of bids were above the AMR and 44 percent of bids were below the AMR.