Record price for Singapore coffee shop means higher rents

Record price for Singapore coffee shop means higher rents

Stallholders living with lower margins as soaring rates, competition bite

By Fiona Chan, Property Reporter and Kua Zhen Yang
STILL WAITING: Renovation has yet to generate more business for Jurong East’s VariNice coffee shop. — MUGILAN RAJASEGERAN

THE record price recently fetched for a Jurong East coffee shop is putting pressure on its stallholders in the form of rocketing rents.
Since new owner Koufu paid $12 million for the large property two months ago, rents at the VariNice coffee shop at Jurong East Street 132 have shot up.

They are now close to those at food courts in glitzy malls, said property experts.

Stallholders grappling with higher rents also lost a week’s business when VariNice was closed for renovations following Koufu’s purchase.

The 4,700 sq ft coffee shop is now clean and sparkling, but tenants say the facelift has yet to generate more business.

Some have raised food prices to cover the rent hike, but others are afraid of driving customers to the competition. There are four other coffee shops in the vicinity.

VariNice has 13 lots. Some are taken up by a single stall paying about $6,000 a month. Other lots are split between two operators, each paying about $3,000. This gives Koufu an annual rental yield of 7 per cent to 8 per cent.

The rents compare with $5,000 to $8,000 for a typical food stall in a ‘good mall’ such as Marina Square, said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

Madam Ren Huai Zhen, who runs a zi char - cooked food - stall at VariNice, is now paying $6,000 a month, $1,000 more than before.

‘Everything became more expensive, except the price of our food,’ she told The Straits Times yesterday.

‘We can survive, but our profit margins are low.’

Mr Xue Mingshou, who runs the Pin Wei Fishball Noodles stall, said he raised the prices of some dishes but had to lower them again when customers did not bite.

‘Competition here is very stiff,’ he said. ‘If I can break even, it’s very good already.’ His rent has gone up by $400 to $3,200 a month.

Mr Xue shares his lot with a duck rice stall, which pays $3,000 in rent and sells about $700 worth of dishes a day.

‘Your stall must sell really nice food in order to survive. There are at least 50 other stalls in the area,’ said the owner, who wanted to be known only as Mr Tan. But he called the rent ‘reasonable’.

Indeed, just next door to VariNice is an S-11 coffee shop, where rents are $7,000 to $8,000 a month.

Property agents say rents at prime coffee shops have escalated in recent months, and it is not uncommon for them to rival those in air-conditioned food courts.

‘In the prime areas such as Geylang, Toa Payoh, Bishan and Bukit Batok, fixed rents can go up to $6,000 or $7,000 a month,’ said Mr Eric Cheng of HSR property group.

Some coffee-shop chains even collect rent on a profit-

sharing basis, which means base rents could be $1,000 a month but stallholders may end up paying five figures if sales are good, he added.

On average, however, monthly coffee-shop rents range from $4,500 to $7,500. In low-end properties in the outskirts, they can go as low as $1,200, said Mr Cheng.

Clearly, there are limits to how much coffee-shop rents can be raised before stallholders are forced to pack it in. This may be why more expensive coffee shops on the market - three, in Yishun, Tampines and Bukit Batok, are said to be going for $15 million each - have yet to find takers.

So for VariNice in Jurong East to charge $6,000 in rent ‘is not excessive’, said Mr Ku of Savills. ‘Foot traffic is very high, and it is near an interchange MRT station, a library and business parks.’

Source : Straits Times - 05 Dec 2007

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Birthday cake made 23 family members sick in Singapore

Birthday cake made 23 family members sick in Singapore

They were among the many who were affected by contaminated chocolate cakes

By Lee Hui Chieh
STOP WORK: Mr Mohd Noor (right), a production manager at Prima Deli, says its food production operators have to suit up when handling food items. But two of the bakery’s workers have tested positive for the salmonella bacteria and the authorities have shut down its factory pending investigation.

IT WAS a birthday celebration one family will never forget - for all the wrong reasons.
Of the 30 family members at the gathering, 23 of them suffered severe food poisoning after eating the birthday cake, a 1.5kg salmonella-laced chocolate cake from bakery chain Prima Deli.

Among those struck down was an 11-month-old baby, who was so ill he had to be admitted to the National University Hospital for three days.

The rest suffered fever, diarrhoea, shivering and even breathing difficulties, in between repeated visits to their family doctors.

Miss Anizah Yusof, 19, bought the cake from a Prima Deli franchise in Jurong Point for the Pasir Ris Park picnic, held two Sundays ago to celebrate the birthdays of her mother and her niece.

She said her four-day illness was the worst episode of diarrhoea she has ever had.
‘I was also very giddy and couldn’t walk properly, so I just lay down on the bed. It was also very difficult to breathe.’

She and her relatives were among 109 people here who, over the last two weeks, have come down with food poisoning from contaminated chocolate cakes baked by Prima Deli.

Of these, eight people were hospitalised, but have since been discharged.

Two of the bakery’s workers have tested positive for the salmonella strain that infected over 100 customers.

The authorities have since ordered a recall of all its products, and shut down its manufacturing facility until it is shown to have cleaned up its act.

The 39 franchises selling its cakes and bread will also be shut down for at least a week.

The cakes appear to have been contaminated, probably through poor hygiene, by a type of bacteria known as salmonella enteritidis.

It is usually spread through food made from infected animals, or food which has been exposed to the stool of infected people.

Those infected experience symptoms such as fever, diarrhoea, vomiting and stomach pains, usually over four to seven days.

So far this year, 1,088 people here, including the latest victims, have been afflicted by food poisoning, caused by various bacteria and viruses such as norovirus and campylobacter. None has died.

This latest incident came to light when an affected family contacted the National Environment Agency, which regulates food handling hygiene, on Nov 23.

The agency informed the Health Ministry, which began investigations after more complaints of the cakes surfaced.

Investigations are still ongoing, but evidence suggests that food handlers may have spread the bacteria to the cakes.

Consumers should throw away any food from Prima Deli.

People should also wash their hands before preparing food, cook food thoroughly before eating it, and avoid mixing or storing raw food with cooked food.

Those with enquiries can call the Health Ministry on 1800-225-4122 or the Agri-Food and Veterinary Authority on 1800-226-2250.

Miss Anizah said her family members are all back on their feet, and are now looking to see if they can get some compensation.

She called Prima Deli yesterday, and has been asked to submit the receipts of their medical treatment for consideration.
109

Number of people infected in the latest food poisoning outbreak caused by salmonella enteritidis. Most of them have recovered.
8

Number of people hospitalised, three of whom are children. All have since been discharged. Average length of hospitalisation: three to four days.
1,088

Total number of people hit by food poisoning so far this year. They were infected by different bacteria and viruses including salmonella, norovirus and campylobacter.
Source : Straits Times - 05 Dec 2007

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Singapore Bakery’s retail outlets: Closed until Tuesday

Singapore Bakery’s retail outlets: Closed until Tuesday
Bakery’s factory: Closed till futher notice

Recall extended to bread and other cakes; Prima initiates disinfection of factory premises

By Diana Othman & Maria Almenoar
TO SHUT: All 39 of the Prima Deli franchises islandwide will be closed from today. — ST PHOTO: LAU FOOK KONG

TWO food handlers from Prima Food have tested positive for the bacteria which infected at least 109 people in the latest food poisoning episode here.
The cases have been traced to chocolate cakes from the company’s Prima Deli bakery outlets, and the authorities have broadened an initial recall on such cakes to include all bread, pastries and cakes made by Prima, sold at 39 outlets islandwide.

The company has also been ordered to stop operations at its Keppel Road factory pending investigations, and its franchises will shut for at least a week.

Prima had to ’stop all production as a precautionary measure as investigations are still ongoing to establish the source of contamination’, said the Agri-Food and Veterinary Authority (AVA) yesterday.

At Prima’s factory yesterday, its 100 workers were sent home as operation ‘disinfect and sanitise’ swung into action. The process, which involves stripping away all surface materials and wiping all surfaces such as ceilings, floors, walls and production equipment with sanitiser concentrate, is likely to take two days, said a Prima spokesman.

AVA said, however, that the production facility will be allowed to reopen only when its inspectors have given it the thumbs up. AVA oversees food safety for both primary and processed food sold in Singapore.

With the Prima Deli outlets left with empty shelves, its management said it will close them from today until Tuesday.

Investigations into the food poisoning are continuing as the Ministry of Health (MOH) is still conducting tests on various samples from the factory.

The outbreak, first reported to MOH on Nov 23, eventually saw 109 people falling ill after eating Prima Deli’s chocolate cakes.

Eight were hospitalised but have since been discharged. They tested positive for salmonella enteritidis, which causes symptoms such as fever, diarrhoea, vomiting and abdominal pain.

Initial tests showed that the salmonella bacteria was a likely culprit.

Preliminary results singled out an employee who was discovered to be a carrier of the salmonella bacteria. Carriers show no symptoms of food poisoning, but can pass it on through stool.

The employee had handled butter cream, an ingredient used as a layer of cream in between sponges of the cakes. The cream is not cooked, unlike the cake itself, where baking kills the bacteria.

About 400 chocolate cakes have been recalled and disposed of since last Friday.

Ms Pansy Wong, deputy general manager of Prima Food, said this was the first such incident in the company’s largely clean history.

Its workers have to wear a standard suit consisting of a long-sleeved shirt and trousers, a long plastic tunic, plastic gloves, a face mask and even a cloth headgear.

They also have to disinfect their hands by washing, scrubbing their nails and applying hand sanitisers.

The company is sending all its workers for salmonella testing, including the 50 involved in cake-making.

It has also created a hotline on 6277-7171 for affected customers.

The 39 Prima Deli franchises were told last night that they would be shut for at least a week.

Miss Serene Oon, manager at a Clementi West outlet estimated that she would lose more than $5,000.

‘What to do? We have nothing to sell. We have no choice but to close,’ she said.

The owner of the Centrepoint outlet, Mr Pal Singh, said he would only lose a ‘few hundred dollars’, as most of his sales were through cake orders.

He said he would try to stay open so that he can explain the situation to customers.

‘It’s not something I’m going to lose a night’s sleep over,’ he said.

Source : Straits Times - 05 Dec 2007

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ComfortDelGro to increase S’pore taxi fares

ComfortDelGro to increase S’pore taxi fares

By Christopher Tan, Senior Correspondent

IT IS official. Taxi fares are going up.

Taxi giant ComfortDelGro Corp has notified the Public Transport Council (PTC) about an imminent fare increase. The PTC could not say more.

Commuters can expect to pay more from as early as the week before Christmas, as taxi operators have to inform the council at least two weeks before any fare changes.

For its part, ComfortDelGro again declined to comment, as it has for several weeks since speculation about a hike first started.

Sources, however, said the adjustment will include a 30-cent rise in flag-down rate. This would bring the minimum starting fare to $2.80. For newer cabs which meet the stringent Euro IV emission standard, the flag-down will go from $2.70 to $3.

Currently, ComfortDelGro has about 2,000 of such cabs in its fleet.

Commuters can expect changes to the distance and time-based charges too. Surcharges are also expected to be streamlined.

There is speculation that the operator might help cabbies defray electronic road- pricing charges to encourage them to enter the Central Business District - where demand for cabs is high.

The signs of a fare hike had been there for some time as cabbies and their associations have been lobbying for it for several months now, arguing the increase in diesel price and the goods and services tax have eroded drivers’ income substantially.

The plight of cabbies is not lost on commuters. Said merchandiser Ivy Ong, 41, who takes cabs regularly: ‘Will this fare adjustment be helping the taxi-drivers? If their taxi rental goes up, I don’t think it would.’

Citigroup Singapore strategist Lim Jit Soon does not think ComfortDelGro would raise rental this time round as it wants to retain as many drivers as possible ‘in this buoyant market’.

‘What it means is that it might gradually remove some subsidies,’ he said.

For instance, ComfortDelGro is still selling diesel to cabbies at 94 cents a litre, 36 cents cheaper than diesel dispensed at stations run by oil companies.

Source : Straits Times - 05 Dec 2007

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S’pore Ophir-Rochor area slated for trendy makeover

S’pore Ophir-Rochor area slated for trendy makeover

Redevelopment will see new hotels, offices and shops; area to become an ‘extension of Bugis’

By Jessica Cheam
IT IS all a bit sleepy and humdrum now, but the walkways of the Ophir-Rochor zone are set for a jazzy makeover that will add trendy hotels and shops, offices and more.
Plans to rev up the hotchpotch zone - it has old colonial lanes at one end and a hot air balloon at the other - were unveiled by the Government yesterday.

The makeover already has its centrepoint and crown jewel - the eco-friendly South Beach project designed by world- renowned British architect Norman Foster and his partners.

The development includes two towers of up to 45 storeys linked to the conserved military buildings of the old Beach Road camp by an eye-catching ‘environmental filter’ canopy.

There will also be premium office space, two luxury hotels of up to 700 rooms, service apartments and shops on the 3.5ha site, which is being developed by a City Developments consortium.

Minister of State for National Development Grace Fu said yesterday that the landmark project ‘will be a first glimpse into exciting plans ahead for the Ophir Road/ Rochor Road corridor’.

She added that the Government intends to ‘build on the momentum’ by developing land parcels.

The Urban Redevelopment Authority will release more details early next year, but some sites may be included in the Government Land Sales Programme due later this month.

Potential plots up for grabs include the Ophir Road/Beach Road tract in front of Parkview Square - this hosted Cirque Du Soleil in 2005 - and the site at Tan Quee Lan Street, now home to the DHL balloon.

Ms Fu added that the new district will be an ‘extension of Bugis’, connecting Marina Centre to Bugis and Singapore’s civic district.

The landscape, rich in colonial charm, has been constantly changing in the last decade.

When Bugis Junction opened in 1995, property pundits predicted that the project would fail to draw the crowds as it was not a prime location.

But Bugis has blossomed into a trendy youth hangout, complemented by fancy dining and drinking hot spots along Seah and Purvis Streets.

The bohemian charm of independent shops that line nearby Haji Lane also keeps the area buzzing.

Property analysts welcomed the plans.

‘The market needs something on the fringe of the Central Business District (CBD). Office buildings with a mix of retail and hotels will be popular,’ said Mr Ku Swee Yong, director of business development and marketing at Savills Singapore.

Mr Colin Tan, head of research and consultancy at Chesterton International, agreed there was great potential in the area, but said offices would not likely command Grade A rents like in the CBD.

‘Offices here will be ideally suited for small and medium-sized enterprises,’ he said. But more road infrastructure such as broader lanes or expressways are needed to relieve congestion, he added.

Knight Frank’s director for research and consultancy Nicholas Mak welcomed the plans to liven the area, as it ‘has always been a bit sleepy’, but hoped that the area’s heritage and shophouses would be conserved.

Mr Mak said developers will be interested, although a ‘balance of the old and new’ was important in retaining the character of the district.

Source : Straits Times - 05 Dec 2007

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Mindy Yong

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For Sale Singapore Private Apartment / Condo ( FH ) - 05.12.2007

For Sale Singapore Private Apartment / Condo - 05.12.2007