These are the amazing results of the removal of reserve rents

Successful tender bids for market stalls dropped from $146 to $26.

According to a release by the National Environment Agency, with the removal of the reserve rent, the lower range of successful tender bids has decreased from $600 to $21 for cooked food stalls, and $146 to $26 for market stalls over the last five tender exercises. For example, a cooked food stall at Taman Jurong Market and Food Centre was awarded at $21 per month in the June 2012 tender exercise.

Here's more from NEA: 

86 stalls, or 54% of the total stalls awarded to successful bidders since March 2012 would not have been awarded under the previous tender system where bids had to match or exceed the reserve rents set for the stalls. The new tender system, where a reserve rent is no longer set when tendering vacant stalls, was introduced in March 2012 following the hawker centre policy review by the Ministry of the Environment and Water Resources. The revision has also led to occupancy of stalls that were previously vacant for at least six months.

There was also an increase in the number of stalls awarded at bids below the previous reserve rent from March to June 2012. For instance, 12.5% of market stalls that were awarded for the March 2012 tender exercise were below the reserve rent. The percentage rose to 50% for April 2012, and then climbed further to 73% for the subsequent months. A similar trend was also observed for cooked food stalls. These results show that the removal of reserve rent has helped the market to establish the clearing price, and this has benefitted several tenderers.

The policy change also allows vacant stalls to be allocated to the highest bidder, as long as there are competitive bids. This allows for higher occupancy of NEA’s hawker stalls, as the market is no longer restricted by the floor price.

Following the removal of reserve rent, 31 cooked food stalls and 39 market stalls which were vacant between three to 12 months were awarded in the last few tender exercises. Among these, 11(35%) cooked food stalls and 17(44%) market stalls were awarded at below the reserve rent. For example, stall #03-126 at Taman Jurong Market and Food Centre was vacant for 6 months, but was recently awarded at $480. Its original reserve rent would have been $600.

Despite the encouraging signs of falling rentals, NEA also recognises that stalls in popular centres continue to attract high bids from the public, as evident from the top range of successful tender bids. An example is Maxwell Food Centre, where one of the successful tender bids for a cooked food stall was the highest over the five tender exercises at $3,898.

NEA’s next tender exercise will be held on 13 September 2012. Details of the tender and the stalls available will be published in The Straits Times, Lianhe Zaobao, Berita Harian and Tamil Murasu, on 13 September 2012. This information will also be posted on our website at https://www.nea.gov.sg and displayed on the notice board at our NEA Customer Service Centre (CSC) located at 40 Scotts Road, #02-00, Environment Building (next to Newton MRT Station).