Sate Kampar restaurant closes over a rent issue, a side effect of the coronavirus

Sate Kampar, the South Philadelphia BYOB that elevated Malaysian street fare to James Beard Award levels, closed over the weekend after four years. It followed what owner Angelina “Ange” Branca said was her landlord’s refusal to negotiate on rent, which was to rise 15% on June 1 after a five-year term.

The shutdown is therefore only loosely tied to the gutting of the restaurant industry by the coronavirus pandemic. The restaurant had been open for takeout since the government-ordered dining room closings, though like virtually all establishments, its receipts were off. The staff, once numbering 12 to 15, was down to six last week, Branca said in an emotional interview Monday.

In short, Branca and her husband, John, said they could not afford the new rent in the current business climate.

Branca said she would pack up the storefront and then resume serving meals for frontline health workers out of an undetermined commercial kitchen. She hopes to find a new restaurant location.

Branca was a strategist for large corporations such as Deloitte, Fujitsu, and IBM who had married a gym manager from suburban Philadelphia and relocated. She decided on a career change because she was homesick for Southeast Asia.

The Brancas said they invested $280,000 in repairs and upgrades to a onetime shoe store at 1837 E. Passyunk Ave., which opened in early 2016 after outfitting it to evoke a Kuala Lumpur street market. A year later, Sate Kampar was one of 27 semifinalists for best new restaurant in America by the James Beard Foundation.

Though a BYOB, Sate Kampar had a large bar, or kopitiam, where coffee and tea were served. It also had long grills in the back that burned coconut shell charcoal for the signature skewers. Branca’s Malay cooking style does not overlap with the more Chinese-spirited fare at older Malaysian restaurants here such as Banana Leaf and Penang.

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Sate Kampar’s rent situation is fairly common among restaurants and retailers. A rent increase typically accompanies the renewal of a lease, and most restaurateurs try to accommodate by economizing or raising prices. Such strategies have become trickier in recent years as competition has kept down menu prices even as fixed costs such as food and labor have crept up. There is even less room for error now; profit margins at many independent restaurants had shrunk into the single digits before the pandemic.

With business flagging, the Brancas sought a break on the monthly rent, which was to rise to $3,173 from $2,760 under the renewal, Branca said.

Although a $413 increase might seem modest, it would require Sate Kampar to generate about $7,000 more a month to break even, if they followed an industry norm that rent should not exceed 6% of total sales.

When the Brancas’ lawyer told them that talks with landlord Damon Costantini had broken down, the couple decided to close. Costantini did not return a text message seeking comment.

“We want to rebuild and serve people again" as a restaurant, said Branca, who said those with gift cards could use them at future pop-ups. "But our first priority is to serve the community. We don’t want to drop that ball.”