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'A proving ground': Why F&B founders take a chance on incubator spaces with short leases and uncertain odds

For budding F&B entrepreneurs, temporary spaces serve as a place to test their concepts and to learn the realities of running a business.

CNA SingaporeNatasha Ganesan查看原文 ↗

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Punggol East container park tenants upset by impending closure
“试验场”:为什么餐饮业创始人愿意冒险选择租期短、前景不明的孵化器空间?

For budding F&B entrepreneurs, temporary spaces serve as a place to test their concepts and to learn the realities of running a business.

Popular eatery Big Fish Small Fish's roots trace to the Punggol East Container Park where it opened in 2017. (Photo: Big Fish Small Fish)

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SINGAPORE: Chef Peter Smit's journey to opening his restaurant Dirty Supper began on the rooftop of his former flat.

His partner at that time was running a ceramics business and had a studio set up at the rooftop to conduct lessons. They also had a wood-fired barbeque grill which he used to whip up food for friends and family.

Before long, the rooftop became the setting for a "fun supper club". He would go on to test-drive the concept first at an incubator space before running Dirty Supper as a full-fledged restaurant on a one-and-a-half-year lease within the iconic Hua Bee Restaurant.

His restaurant is now a permanent fixture at the Tiong Bahru establishment.

CNA Games Guess Word Crack the word, one row at a time Buzzword Create words using the given letters Mini Sudoku Tiny puzzle, mighty brain teaser Mini Crossword Small grid, big challenge Word Search Spot as many words as you can Show More Show Less Yet, had it not been for the lower-risk options he had with the incubator space and the short-term lease, the 42-year-old reckoned he would not have opened his restaurant. "I wouldn't have actively sought out a space because I don't want to be 'half a million dollars minimum' in debt to open a restaurant. The way that Dirty Supper has happened from the rooftop to now, I've been very, very lucky, and I've just happened to have kind of the right conversations with the right people at the right time. "If it wasn't for those conversations, I most likely wouldn't have Dirty Supper here, and I probably wouldn't be in Singapore," said the Australian-born chef.

Yet, had it not been for the lower-risk options he had with the incubator space and the short-term lease, the 42-year-old reckoned he would not have opened his restaurant.

"I wouldn't have actively sought out a space because I don't want to be 'half a million dollars minimum' in debt to open a restaurant. The way that Dirty Supper has happened from the rooftop to now, I've been very, very lucky, and I've just happened to have kind of the right conversations with the right people at the right time.

"If it wasn't for those conversations, I most likely wouldn't have Dirty Supper here, and I probably wouldn't be in Singapore," said the Australian-born chef.

Originally a supper club, Chef Peter Smit's restaurant Dirty Supper is now permanent fixture within the Hua Bee Restaurant in Tiong Bahru. (Photo: Rachel Tan)

Mr Smit is among a number of F&B business owners in Singapore who got their start through incubators or other temporary spaces before moving on to something more permanent.

That pathway is in the spotlight following recent news that the popular Punggol East container park will close to make way for public housing. Its lease is due to expire at the end of 2026, with occupants required to vacate by Oct 31.

As the F&B tenants mulled the impending loss of the businesses they have built, netizens also questioned why anyone would sink capital into short-term tenancies with no guarantee of longevity.

The site originally began in 2016 as a social enterprise incubator under non-profit Social Innovation Park before evolving into a dining enclave leased by social enterprise City Sprouts in 2022.

At the time, the understanding was that City Sprouts would not hold on to the site for the long term.

Nevertheless, the incubator aspect of the Punggol East container park played a part in birthing several successful F&B businesses, helping them build a fan following and eventually finding permanent footing elsewhere.

Other F&B incubators have emerged in various forms over the years run by private companies, individual restaurant owners, as well as a government-managed scheme meant for hawkers.

While the models differ, they generally offer aspiring entrepreneurs a lower-risk entry into the industry. Some provide shorter tenures and subsidised rents, giving participants room to experiment before deciding whether to take the plunge.

For budding F&B owners, these spaces can be a testing ground to find out whether their concept works, learn the realities of running a business and discover whether they are cut out for the demands of the job.

In 2016, the Singapore-based non-profit Social Innovation Park transformed the vacant plot in Punggol into a space for social innovation that would eventually become the container park.

Under its "social contract" model, tenants received business and financial support in exchange for supporting a social mission of their choice.

Big Fish Small Fish was among the businesses that took a chance on the space, opening there in February 2017.

Co-founder and general manager Ong Wei Sheng was initially drawn to the outdoor concept, where diners could eat amid the park surroundings and unwind after work. It is a relaxing setting and one that worked especially well in Singapore, he said.

But the lower rents were another factor.

"Beyond the appeal of the space itself, the cost was lower compared to other locations, which let us test our concept without over committing early on," said the 41-year-old.

The company still invested a few hundred thousand dollars in the outlet, though Mr Ong did not give an exact figure. But the relatively short commitment made the gamble easier to take.

"What made that easier to commit to is a view we still hold today: there is really no such thing as a forever lease," he said. "Every space is temporary in some sense, so what matters is measuring the risk properly and making the space work for the period you have it.

"Seen that way, a shorter commitment was not a compromise, it was a sensible way to prove demand before taking on longer ones."

Big Fish Small Fish moved out of the container park at the end of their five-year lease in 2022, and has since expanded to four outlets in Singapore.

Big Fish Small Fish was at the Punggol East Container Park from 2017 to 2022. (Photo: Big Fish Small Fish)

For Mr Smit, the opportunity to test Dirty Supper came almost by chance.

He was still working full-time as a head chef when a "random conversation" with bar and restaurant owner Jay Gray led to an opportunity at an F&B incubator that Mr Gray ran.

The incubator, which was later named Ghostwriter, was launched as a space for aspiring F&B entrepreneurs to test their ideas for about three months at a nominal rent of about S$3,000 (US$2,300).

Mr Smit became its first entrepreneur, running his concept there for about 10 months. During his stint, another door opened when he got to know the owner of Unlisted Collection, which has a portfolio of restaurants and boutique hospitality concepts across Singapore, Ireland, and the United Kingdom.

Several months later, Mr Smit learnt that a restaurant operating within Hua Bee Restaurant was closing. He was offered the space to run Dirty Supper for the remainder of its lease – about 1.5 years.

"The original agreement … was (that) I just run Dirty Supper until the lease runs out, and when the lease runs out, then we see what happens," he said.

"It just so happened that we were successful and we were quite busy. So they said, 'Hey, if you want to keep going, keep going'. So even where I am now, it kind of was, without being an advertised incubator, it was still a bit of an incubator (where) you have this space for a short amount of time."

The space used for the first edition of Mr Jay Gray's food incubator, Ghostwriter. (Photo: Jay Gray)

The limited runway did not deter him. He was "bored of having to please investors", he said, and doubted he could have found one willing to back Dirty Supper in the form he envisioned.

The restaurant's concept has evolved to focus on whole-animal cooking, an approach which aims to use all parts of an animal as much as possible. While the concept itself was not new, Mr Smit did not think many restaurants were doing it the same way.

"I wouldn't have been able to find an actual investor that would have been happy to work the way that we work," he said, adding that the short lease gave him a chance to run his concept the way he wanted.

"It's just kind of like a proving ground. Not everything works, so if it didn't work, then I would go back to the drawing board and then go, okay, maybe that doesn't work here. So then, what can we do next?

"You don't really have overheads … I only had to worry about basically making money to cover my wage and cover my food and make a little bit of profit without all the rest of the overheads."

Mr Peter Smit preparing a brunch menu item at his restaurant Dirty Supper. (Photo: Rachel Tan)

Mr Gray, who is behind several Singapore cocktail bars including Low Tide and Sago House, launched Ghostwriter around 2023.

"Many talented young individuals were looking to take their ideas and put it all on the line. Having done this several times over, to varying degrees of success, I thought it would be a great idea to use a space we had at 98 Club Street to test drive ideas," he said.

After Mr Smit's stint, Mr Gray decided to open the space to others, putting out a simple call on Instagram for entrepreneurs.

The arrangement was kept straightforward: the entrepreneurs paid for their rent and goods, while Mr Gray covered the remaining costs. The profits went to the entrepreneurs.

He also did away with deposits and other administrative requirements, allowing participants to concentrate on their concepts and customers.

"The idea is to prepare people for the reality, not to hide it from them. They needed to understand that this was an opportunity to focus on the things you won't have time to when you're running full tilt to make wage and rent," he said.

"We allowed them to focus on what their guests want - or don't want. Test drive ideas, drinks, events, nights. Things you can't normally take risks on."

Six budding businesses went through the incubator. All six eventually opened permanent outlets, although some did so under different brand names.

Mr Gray is now preparing to launch Ghostwriter 2.0 in November, with a greater focus on education and collaboration to bring people together, such as a chef with a bartender and both with suppliers.

As part of the Chef X programme, participants take over a commercial restaurant at Clarke Quay Central for about four or eight weeks. (Photo: Far East Organization)

Other incubators have taken a similarly low-risk approach.

Far East Organization launched Baker X in December 2021 to help home-based bakers who wanted to move from their home kitchens into commercial spaces but were hesitant due to the risks involved, said Ms Deborah Tan, director for operations and marketing for the company's commercial group.

That concept later evolved into Chef X, launched in April 2024 to give aspiring chefs hands-on experience running a commercial restaurant.

Located at Clarke Quay Central, participants take over a fully equipped 24-seat restaurant for four or eight weeks, handling everything from dine-in and takeaway orders to interacting with customers and managing food and drinks.

This allows them to test and showcase their culinary concepts in a real-world setting with minimal financial risk, the Far East Organization told CNA.

Their main cost for the space is a S$250 monthly maintenance fee for the commercial kitchen equipment.

Each participant also receives guidance from a veteran industry mentor on areas such as menu development, food presentation and managing a business and its staff.

To date, 14 chefs have gone through Chef X, serving concepts ranging from modern Japanese and Korean food to local and fusion fare. Five have since opened their own outlets, according to the Far East Organization.

INCUBATION SCHEME FOR HAWKERS

Unlike incubators such as Ghostwriter and Chef X, which give F&B entrepreneurs temporary spaces to experiment with their concepts, the National Environment Agency's (NEA) Incubation Stall Programme is geared specifically towards better supporting aspiring hawkers and sustaining the hawker trade.

Launched in 2018, the programme offers eligible participants pre-fitted hawker stalls and subsidised stall rental for 15 months, lowering their start-up costs to allow them to test their business plans, refine recipes and hone their cooking skills, an NEA spokesperson told CNA.

As of Jun 30, 109 stalls had been allocated to aspiring hawkers, with about half of the participants going on to become full-fledged hawkers after completing the programme, the agency added.

Among them are sisters Serene and Danielle Tan, who started Butter Town, a hawker bakery specialising in shio pan, or Japanese salt bread.

They initially considered opening a cafe but were deterred by the higher overheads. With shio pan still relatively unfamiliar in Singapore at the time they were thinking of starting a business, the sisters wanted to test demand before committing.

"If we wanna test it out, we do it somewhere where maybe the cost is lower," said Ms Serene Tan, 34. They applied for the NEA programme in 2022 and took over a stall at Holland Drive Food Centre in May 2023.

Butter Town’s bakes, including the signature shio pans, displayed at its hawker stall at Holland Drive Market and Food Centre on Sep 9, 2026. (Photo: CNA/Ooi Boon Keong)

Their rent, which ranged from S$1,200 to S$1,800, was subsidised by 50 per cent for the first six months and 25 per cent for the next six. They still had to pay for their own equipment and other expenses such as an oven and packaging items, investing about S$24,000 between them.

"From the start, it was more of a testing. We wanted to see how it goes," said Ms Serene Tan. Ms Danielle Tan added: "Because we don't know what will happen. Maybe next month, there's another trend that's coming out."

The gamble paid off. Butter Town built a base of regular customers at Holland Drive and continued operating there after the programme. They also expanded and have a retail outlet at CT Hub 2, a business centre in the Kallang District, to their name.

Sisters and co-owners of Butter Town, Serene Tan (left), 34, and Danielle Tan (right), 30, in front of their hawker stall at Holland Drive Market and Food Centre on Sep 9, 2026. (Photo: CNA/Ooi Boon Keong)

The sisters also operate shio pan vending machines, or ATMs as they call it, at Woodleigh Village hawker centre, Hillion mall and Our Tampines Hub to reach out to more customers "at the lowest possible cost".

Despite their wish to expand further, rent remains a major constraint.

Looking back, Ms Danielle Tan, 30, said she was grateful to have gone through the incubator route. "I don't need to go through the normal route with the bidding of the stall which can go up to S$4,000 to S$5,000.

"I think it will take some time to recoup and break even or start to earn some money. I think the programme is really helpful if you really want to try out as a young entrepreneur."

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