Start-ups feel at home in Stamford House

Source : Straits Times – 29 Jul 2009

STAMFORD House might as well bill itself as The Entrepreneur Mall now.

About half of the 51 units in the historic three-storey building are rented to first-time business owners, drawn there by the low rents and short-term leases.

Last month, a company importing organic cosmetics set up its first retail store in the block; this weekend, a 20-year-old entrepreneur will debut her concept store, where members have the right to pick from a range of free product samples.

The block made its name as a ‘go to’ place for furniture in the late 1990s, with big tenants like Picket & Rail and Pennsylvania House.

But they started moving out because of low traffic arising from a lack of publicity, and a high tenant turnover due to the short-term leases. A clutch of local designers moved in next, only to start leaving for similar reasons.

Stamford House’s short-term leases last up to a year, instead of the market practice of two or three years with a high chance of renewal thrown in, said Mr Colin Tan, director of research and consultancy at real estate consultancy Chesterton Suntec International.

The leases are short because the building is on the Reserve List of the Government Land Sales Programme, and could be redeveloped the moment a developer offers the minimum bid.

Mr Tan said few established retailers would accept such short leases; they do not find it worth their while to renovate the premises for only a short stay.

It is thus no surprise that the building has become popular with start-ups looking to fine-tune their businesses.

‘It is located in the heart of town, with relatively low rents,’ he said. ‘The more start-ups keep costs down, the longer they will survive. This is critical in the first few years.’

He noted that rents at Stamford House are half, or even less than half, those in nearby malls like Raffles City.

The low rent and the short lease attracted Ms Elfanie Tan, who pays $7 per sq ft to run Fr3b, the concept store which will give away free product samples to its registered members. She said: ‘The building has the feel of a hotel and rent is low. It made it possible to start. If the rent were higher, I might have been too scared to take it up.’

For home-grown designer Jo Soh, 33, a month’s lease was enough time to find out how her creations under the Hansel label would fare in the market.

Now thinking of opening her first permanent store, she said: ‘The response at Stamford was good. Now we know opening a store is an option.’

The Singapore Land Authority, the building’s landlord, said the high tenant turnover has not dampened occupancy, now at more than 90 per cent.

Its spokesman said: ‘We do not limit the trades allowed or specially source for tenants of a particular trade. The current trade mix evolved on its own based on market demand and supply.’

Some current tenants are, however, disgruntled with Stamford House’s lack of identity. Make-up Forever manager Alicia Chong said of the short leases: ‘I’ve put off renovating for many years. The landlord keeps saying rents might not be renewed, but then they are. It’s frustrating not knowing what will happen next.’