HDB to selectively acquire privately held shops to boost retail supply if needed

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.

- Ng Keng Gene

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, while rents for shops directly leased out by the statutory board have mostly held steady.

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.