Long-term Viability of Shops in HDB Heartlands
Ministry of National DevelopmentSpeakers
Summary
This question concerns Member of Parliament Tin Pei Ling’s inquiry into the long-term viability of HDB heartland shops and whether rents can be maintained during renewals in mature and aged estates. Minister Lawrence Wong cited positive business outlook surveys and the Revitalisation of Shops scheme as evidence of shop viability and ongoing efforts to improve competitiveness. He explained that renewal rents are adjusted to prevailing market rates by licensed valuers, accounting for factors such as location, size, and the age of the premises. HDB provides flexible tenancy periods of up to three years for business certainty and implements assistance measures to stagger rental increases. Finally, Minister Lawrence Wong emphasized that these shops remain integral to public housing by providing residents with convenient access to various goods and services.
Transcript
45 Ms Tin Pei Ling asked the Minister for National Development (a) what is the Ministry's assessment of the long-term viability of shops and businesses in HDB heartlands; and (b) if rents can be maintained for shops and businesses in mature and aged HDB estates during tenancy renewal.
Mr Lawrence Wong: HDB shops are an integral part of public housing estates. They play an important role in serving the needs of residents by providing convenient access to various goods and services.
The last published Business Expectations Survey of HDB shopkeepers in 2013 found that more than eight in 10 shopkeepers intended to continue with their business in the next five years. This proportion has also been on the rise since 2007, suggesting a relatively positive business outlook. The Revitalisation of Shops (ROS) scheme was also introduced since 2007 to help enhance the vibrancy and improve the competitiveness of HDB shops.
HDB ensures that the rents of HDB shops are determined fairly. For new shops, the rent for the first tenancy is determined through open bidding by shopkeepers. At tenancy renewal, the rent is adjusted to the prevailing market rent. The market rents are assessed by licensed valuers, taking into account recent lettings of comparable premises in the vicinity. Adjustments are also made for the location, size and age of the premises, among other factors.
HDB also allows flexibility in tenancy periods of between one and three years. Tenants who prefer more certainty can opt for a two- or three-year tenancy. HDB also has in place assistance measures to stagger rental increases.