In Singapore’s fast-paced food and catering landscape, growth opportunities are everywhere, but only the smartest operators turn them into sustainable profits. From corporate catering and institutional contracts to high-volume meal production, every expansion decision must strike the right balance between cost control, operational efficiency, and scalability.
That is why more catering businesses are turning to ghost kitchens and central production units as a strategic alternative to traditional commercial kitchens.
But how do you know if renting a ghost kitchen will truly deliver value?
The answer lies in understanding return on investment (ROI). By evaluating both the costs and gains of operating from a ghost kitchen, catering businesses can make confident, data-driven decisions. Below is a practical guide to calculating ROI and why central production units are becoming a game-changer for Singapore’s catering sector.
Start with the real cost of entry
Before measuring returns, you need clarity on what you are investing in.
In space-limited Singapore, traditional commercial kitchens often come with high rental commitments, long leases, and significant fit-out costs. Ghost kitchens, particularly central production units, offer a more predictable and capital-efficient entry point.
Key costs to consider include:
- Monthly rental fees and deposits, which are often structured with flexible terms
- Licensing and food safety compliance, which is typically faster in pre-approved facilities
- Specialised equipment, depending on your production scale or menu requirements
Why this matters:
Setting up a new kitchen in Singapore can involve lengthy approvals and substantial upfront capital. Renting a ready-to-operate ghost kitchen allows caterers to launch faster, preserve cash flow, and start generating revenue sooner—improving ROI from day one.
Factor in manpower and labour efficiencies
Labour costs are among the most significant pressures on catering businesses in Singapore. Central production units are designed to maximise productivity while minimising manpower strain.
Labour efficiencies often come from:
- No need for in-house maintenance or facilities management staff
- Streamlined layouts that reduce prep time and unnecessary movement
- Centralised production that eliminates duplication across multiple locations
Real-world impact:
By consolidating production into one efficient hub, catering businesses can handle higher order volumes without proportionally increasing headcount, an important advantage in a tight labour market.
Measure operational time savings
In catering, time is not just money—it is capacity.
Ghost kitchens and central production units are purpose-built for speed, consistency, and scale. Their design supports high-volume output without compromising quality.
Operational advantages include:
- Optimised workflows that allow parallel prep, cooking, and packing
- Shared infrastructure, such as cold rooms, loading bays, and storage
- Integrated digital systems for order management, inventory, and scheduling
Example:
Instead of relying on manual tracking and spreadsheets, catering operators can use integrated systems to manage large orders, forecast inventory, and reduce waste. Over weeks and months, these time savings translate directly into higher profitability.
Unlock scalable revenue opportunities
ROI is not only about reducing costs—it is also about unlocking new growth potential.
Operating from a ghost kitchen enables caterers to:
- Scale production for large contracts without relocating
- Take on more frequent or higher-volume orders
- Test new menus, formats, or client segments with minimal risk
Example:
A caterer could use the same central kitchen to serve corporate meals, institutional catering, and a delivery-only brand—diversifying revenue streams without additional real estate costs.
Calculate your ROI
Once you have reviewed costs, efficiencies, and revenue potential, calculating ROI is straightforward.
ROI Formula:
ROI = (Net Financial Gain ÷ Total Investment Cost) × 100
Where:
- Net Financial Gain is profit after all fixed and variable costs
- Total Investment Cost includes monthly rent and kitchen-related fees
Example calculation:
- Monthly revenue contribution (after food and hourly labour): S$10,000
- Monthly ghost kitchen cost: S$4,000
- Net financial gain: S$6,000
ROI = (6,000 ÷ 4,000) × 100 = 150%
While actual figures will vary depending on location, kitchen size, utilisation, and the scale of operations, this example demonstrates why central production units can deliver significantly higher returns than traditional commercial kitchens, which often carry higher fixed costs and long-term lease commitments.
Why ghost kitchens make sense in Singapore
For catering businesses at any stage, ghost kitchens provide a smarter, lower-risk pathway to growth.
Benefits include:
- Lower upfront capital requirements
- Faster time-to-market
- Scalable infrastructure for fluctuating demand
- Reduced operational complexity
- The ability to support multiple brands or contracts from one location
In a city where space is limited and efficiency is critical, centralised production offers a clear competitive advantage.
Scale smarter with Smart City Kitchens
Smart City Kitchens’ central production units are designed to support high-volume catering, food manufacturing, and multi-brand operations in Singapore. With purpose-built infrastructure, scalable layouts, and professionally managed facilities, businesses can focus on production excellence rather than property constraints.