97% of coffee shops rented out by HDB did not see increase in rents in last 5 years: Sim Ann
Of the 776 coffee shops in Singapore, 374 are owned by HDB and rented out to operators.
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07 Feb 2024 12:26PM (Updated: 07 Feb 2024 02:26PM)
SINGAPORE: The Housing and Development Board (HDB) did not increase rent for 97 per cent of the coffee shops it rented out to operators over the last five years, Senior Minister of State for National Development Sim Ann said on Wednesday (Feb 7).
Ms Sim was responding in Parliament to MP Yeo Wan Ling's (PAP-Pasir Ris-Punggol) question on where the Ministry of National Development would consider taking further measures to help coffee shop stallholders who face increasing rents and other business overheads.
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CNA previously reported that higher rents and rising costs were forcing some stallholders in heartland coffee shops to call it quits.
Addressing the issue, Ms Sim said HDB is committed to ensuring that rents payable by operators of HDB rental coffee shops remain stable.
Of the 776 coffee shops in Singapore, 374 are owned by HDB and rented out to operators, while 402 were sold and hence privately owned.
Over the last five years, HDB did not increase the rent for 97 per cent of HDB rental coffee shops at renewal, and the increase in the median rent of HDB rental coffee shops was limited to 1.6 per cent in this period.
The Housing and Development Board (HDB) is committed to ensuring that the rent payable by operators of its rental coffeeshops remains stable, said Senior Minister of State for National Development Sim Ann. There are… 776 coffee shops in HDB estates - 374 are owned by HDB and rented to operators while 402 are sold. Replying to an MP’s question in Parliament on Wednesday (Feb 7), Ms Sim said over the last five years, HDB did not increase the rent for 97 per cent of its rental coffeeshops at renewal. The increase in the median rent of HDB rental coffeeshops was limited to 1.6 per cent during this period. Ms Sim said this is part of HDB’s efforts to help operators and stallholders in a rising cost environment. To help rental coffeeshop operators in providing budget meals by 2026, HDB offers rental discounts of five per cent for one year, on condition that they sell such meals. Ms Sim said HDB does not regulate the stall rentals that owners charge, as these transactions are private commercial agreements between the coffeeshop owners and the stall operators. Coffeeshop operators and stallholders may tap on schemes to adopt digital solutions and improve productivity. see more
"This is part of HDB's efforts to help operators and stallholders in a rising cost environment," said Ms Sim.
To help HDB rental coffee shop operators transition to providing budget meals by 2026, HDB offers a rental discount of 5 per cent for a period of one year - subject to verification that budget meals and drinks have been implemented.
HDB does not regulate stall rentals for sold eating houses as the transactions are private commercial agreements between coffee shop owners and stall operators, Ms Sim said.
The minister also cited schemes, such as the Heartlands Go Digital Scheme, that stallholders and coffee shop operators can tap to improve productivity.
Found a budget meal at a coffee shop? Add it to this government crowdsourcing website
All HDB coffee shops to offer budget meal options by 2026
In a supplementary question, Ms Yeo cited escalating rental prices of up to 30 per cent. She asked what are the considerations in deciding which coffee shops are sold or rented.Ms Sim replied that while HDB began selling coffee shops from 1988, it stopped doing so from 1998.
Since 2018, all new HDB coffeeshops have been let out under the Price-Quality Method tender, which is based on a range of criteria beyond rent. These include affordability considerations.
As a landlord, HDB does its part to keep rents stable and encourages the provision of affordable meals, said Ms Sim.
She added that HDB is mindful that that coffee shops need to be operated by those in the trade. "We are also mindful that HDB is not itself directly in the business of cooked food provision. So we do need to allow room for the coffee shop operators as well as stallholders to abide by market principles and operate.
"I think Ms Yeo would appreciate that our approach towards sold, privately owned coffee shops would have to be different than the ones that HDB owns and then rents out because the relationship with the operators in the two instances are quite different."
Assoc Prof Jamus Lim (WP-Sengkang) asked if there are plans to reacquire privately owned coffee shops so that all coffee shops would come under HDB, adding that some private operators in his constituency have passed on rental increases to customers in the form of higher food prices.
To this, Ms Sim replied: "I think that's something that (the) government would consider very carefully and it's not a step that we would take lightly.
"In terms of how (the) government generally deals with the private sector, I think it's also important that we are clear about where the market is free to operate and where the government comes in with interventions."
She said that the best safeguard against higher food prices would be by ensuring a "wide availability" of food options across Singapore.
