HDB to selectively acquire privately held shops if needed to boost retail supply: Sun Xueling
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ST had earlier reported that rents have more than doubled for privately owned HDB shops, while rents for shops directly leased out by the board have mostly held steady.
PHOTO: ST FILE
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SINGAPORE – The Housing Board will selectively acquire privately held HDB shops if needed, to meet the demand for new retail supply in existing estates, said Senior Minister of State for National Development Sun Xueling.
Responding to MPs on high rental rates for HDB shops, Ms Sun said that over time, there will be an increase in the supply of such shops, with a higher proportion of units directly rented out by the Housing Board.
The Straits Times had earlier reported that rents have more than doubled for privately owned HDB shops
There were around 15,500 HDB shops as at August, of which about 8,500 were privately owned and 7,000 rented out by the HDB, Ms Sun said.
Of the privately owned shops, around 7,700 were sold on 99-year leases and still have more than 30 years left on their leases.
The other 740 shops were sold on 30-year leases, and more than 80 per cent of these have less than 10 years remaining on their leases. These shops will progressively be returned to HDB and then tenanted out, she said.
Ms Sun noted that HDB stopped selling shops in 1998, and has been renting shops directly to businesses – typically for three-year periods.
She told the House that rents in 90 per cent of shops leased out by HDB have not increased in the last five years.
Over the last three years, average rents increased at a moderate pace of between 1.3 per cent and 3.3 per cent each year, she added.
The authorities are aware that rents for privately owned HDB shops have “seen a steep increase recently”, said Ms Sun, adding that this coincided with a higher proportion of rental transactions involving smaller units, which tend to command higher per square foot rent.
Asked by Mr Henry Kwek (Kebun Baru) if HDB could prioritise compulsory acquisitions for trades where high rental costs could have a larger impact on cost of living – such as cooked food shops – Ms Sun said one consideration will be whether the product or service is essential.
“When it comes to essential services – specifically in the areas of food and medical service – we will take a more critical look at it, especially where we deem that the supply in an area is less than what would be optimal,” she said.
HDB would then look into selectively acquiring shops so that overall supply goes up, said Ms Sun.
Responding to Mr Ang Wei Neng (West Coast-Jurong West GRC) on the number of privately owned HDB shops that have been acquired thus far, Ms Sun said she would have to check whether the board has ever made such acquisitions, as this is not HDB’s current policy.
She added that the privately owned shops were likely sold to their current owners at a high market price.
“If we are to look at acquiring the sold shop, which was already transacted at a high price, I don’t exactly think that that is a good use of taxpayers’ money,” she said.
She added that any acquisition decision will be made after considering the overall supply of shops in the market, and the mix of products and services that they offer.
MPs also raised concerns over sublet rents – something Ms Sun said HDB does not currently collect data on.
Replying to Ms Mariam Jaafar (Sembawang GRC) on what HDB is doing about rising sublet rents, Ms Sun said one possibility is to require master tenants to provide information on sublet rental rates as part of the tender process.
Ms Sun said HDB calls for price-quality method tenders for all new neighbourhood centres, eating houses and supermarkets, where a bid’s quality, which includes factors such as track record and community initiatives, accounts for 60 per cent of its tender points.
“Apart from looking at generic affordability within the ‘quality’ condition, we might look at how there can be a better provisioning of information with regard to sublet rent as part of their ‘quality’ matrix,” she said.
Leader of the Opposition Pritam Singh suggested that sublet rent data should be published to reflect cost pressures faced by the public.
In response, Ms Sun said that while the Government maintains an open stance on greater data transparency, she gave the caveat that “we may not also want to overstep, because there are market forces at play”.
“We have to let business owners – whether or not it’s a landlord or the sublet tenant – make their decisions based on what they deem is relevant and suitable for their business considerations.”
On HDB shops tendered out for use as medical facilities, Ms Sun said the average rent per sq ft rose from $10.40 in 2020 to $28.50 in the first half of 2025.
For such units in existing HDB blocks – typically in older estates – the average rent per sq ft increased from $5.70 in 2020 to $11.40 in the first half of 2025.
The figure for new lettings in Build-To-Order developments was $12.30 in 2020 and $39.30 in the first half of 2025.
“The difference is mainly due to the fact that these new leases are located in newer residential areas, where the shop units are newer and the businesses may consider them to be more attractive,” she said.
Earlier in March, a firm won a tender for a unit of about 50 sq m in Tampines after placing a record bid of $52,188 in monthly rent
In May, HDB and the Ministry of Health piloted price-quality method tenders for general practitioner (GP) clinics, with 70 per cent of the tender score used to evaluate the tenderer’s quality, instead of awarding based purely on price.
The first tender for a clinic awarded under this model
She said the authorities are still fine-tuning the model, which will be used for new GP clinics in HDB estates.
