Rising rents and staffing woes push F&B owners to cheaper, scalable ventures in Malaysia
As Singapore’s food and beverage scene buckles under surging operational costs and labour shortages, many restaurateurs are crossing the Causeway to Johor Bahru in search of lower expenses and business survival.
Fleeing High Costs, Finding Breathing Room
Singapore’s food and beverage (F&B) industry is witnessing its sharpest contraction in nearly two decades. In 2024 alone, 3,047 establishments shuttered, followed by 1,404 more in just the first half of 2025. Among the closures are iconic names like Crystal Jade’s Holland Village outlet and Michelin-starred Poise. Faced with relentless rent hikes and an ongoing staffing crunch, many restaurateurs are now looking across the border to Malaysia — especially Johor Bahru — for relief.
One of them is Hyderabad-born chef Govinda Rajan, who recently opened his first Malaysian branch of Mr Biryani. After just three months, he is already considering further expansion. “It’s a lifeline,” he told South China Morning Post, noting that while some ingredients are more expensive in Malaysia, rent and wage savings far outweigh those costs.
Labour Shortages And Tight Policies Fuel The Shift
Singapore’s restrictive foreign worker policies and locals’ general reluctance toward service jobs have left the F&B sector scrambling. Many businesses are short-staffed and burdened with high operational overheads. Geoffrey Tai from Temasek Polytechnic remarked that regional expansion is no longer just a growth strategy but a survival tactic. Countries like Malaysia, with a rising middle class and more accessible labour markets, present a compelling alternative.
Keith Koh, owner of the popular Lad & Dad, recently opened a Muslim-friendly outlet in Kuala Lumpur. He credits the move with helping him rediscover his love for the industry, after years of exhaustion navigating Singapore’s punishing business environment.
Opportunity Abroad, But Not Without RiskDespite the exodus, the local scene still saw 3,790 new F&B entrants in 2024 and almost 2,000 more in the first half of 2025. However, insiders caution many underestimate Singapore’s brutal reality—most restaurants fail within two years due to razor-thin margins and relentless competition.
Chef-owner Bjorn Shen, who has expanded operations to Penang and Bali, claims that profits abroad can reach 20–30 percent, a significant contrast to Singapore’s slim 5–7 percent. “You can actually breathe again,” he said, referring to both financial and emotional relief.
Johor Bahru: A Viable Escape Valve
For many, Johor Bahru offers the perfect balance: geographic proximity, cultural familiarity, and drastically lower rents. It’s increasingly being viewed not just as an escape, but a strategic extension of the Singaporean F&B model.
Though ingredients in Malaysia may cost more — partly due to supply routes and quality demands — savings from property leases and staffing still translate to healthier profit margins. Restaurateurs say they can experiment, scale, and even fail with less devastating consequences than in Singapore.
The restaurant drain to Malaysia underscores a deeper economic tension across the Singapore Strait. While Singapore remains a culinary powerhouse, its escalating business costs risk pushing talent and innovation elsewhere. For Indonesians and Malaysians, this shift could signal a richer, more diverse F&B landscape closer to home — and more cross-border economic interplay in the years ahead.
Sources: Malay Mail (2025) , Yahoo! News Malaysia (2025)
Keywords: Singapore Restaurateurs, Johor Bahru Restaurants, F&B Closures, High Rent Singapore, Labour Shortage Singapore, Restaurant Expansion Malaysia
