Government Boost Hdb Shop Supply Amid Rising Rents
Sun Xueling, Senior Minister of State for National Development, has announced that the government will increase the supply of HDB shops in existing estates to meet the rising demand for retail services. She stated that the government will inject new supply when necessary and may even selectively acquire privately owned HDB shops.
There are currently about 15,500 HDB shops in Singapore, with 8,500 (55%) sold to private owners and the remaining 7,000 leased by HDB. HDB stopped selling shops in 1998.
Out of the privately owned shops, about 740 units were sold on 30-year leases, with more than 80% of them having less than 10 years left on their lease. These units will be returned to HDB and leased out in the future.
However, about 7,700 privately owned shops were sold on 99-year leases, with most of them having more than 30 years left. This means that the majority of these units will not be returned to HDB anytime soon.
Sun addressed recent concerns over rising commercial rents among HDB shops, stating that the government will keep a close eye on the situation and look at better ways to keep the public and affected parties informed.
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She also shared that the average psf rents for HDB shops have seen a steep increase, coinciding with a higher proportion of rental transactions involving smaller units which tend to command higher rents.
She also mentioned a recent case where a GP clinic in Tampines was awarded to I-Health Medical Holdings after submitting a monthly rent bid of $52,188, the highest psf rental bid for such a unit to date.
Sun also provided figures for the average psf rents for shops leased by HDB, which have seen a gradual increase over the years, with those in newer housing estates commanding higher rents due to their location.
To improve quality outcomes and lower bidding pressure, HDB and MOH have started piloting a price-quality method in tenders for GP clinics since May this year.
Under this approach, HDB evaluates both price and quality factors instead of simply awarding the unit to the highest price bidder. This was implemented at Bartley Beacon, a BTO project in Bidadari, where the 1,076 sq ft GP clinic was awarded at a lower rent compared to the average awarded bid for such units in the last three years.
Sun also addressed concerns over sublet rents rising more quickly than HDB’s main tenants, stating that HDB will keep a close eye on the situation and look into better ways to inform the public and those affected.