Government Boost Hdb Shop Supply Amid Rising Rents
PropertyGuru.com.sg
To meet the increasing demand for retail services and shops in HDB estates, the government will inject new supply “when necessary”, according to Sun Xueling, Senior Minister of State for National Development. Sun also mentioned that this includes acquiring privately held HDB shops selectively, if needed.
Currently, there are about 15,500 HDB shops in Singapore as of August this year. Out of these, 8,500 (55%) were sold by HDB to private owners, while HDB leased the remaining 7,000 shops. The government has stopped selling HDB shops in 1998.
Of the privately owned shops, about 740 units were sold on 30-year leases, and more than 80% of these units have less than 10 years left on their lease. Sun said that these units will be gradually returned to HDB, which will lease them out in the future.
However, approximately 7,700 privately owned shops were sold on 99-year leases, and most of these units have more than 30 years left on their lease.
Sun addressed several parliamentary questions submitted by Members of Parliament concerning recent reports of rising commercial rents among HDB shops in HDB estates. In response, she informed Parliament that the government is aware that per square foot rents for privately owned HDB shops have seen a sharp rise recently. This coincided with a higher proportion of rental transactions involving smaller units, which tend to command higher per square foot rent.
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The most notable case was the tender for a 559.52 sq ft clinic at 954C Tampines Street 96, which was awarded to I-Health Medical Holdings in March after the company submitted a record monthly rental bid of $52,188. The tender for this GP clinic had a three-year lease and attracted 13 bids when it closed. At the time, HDB noted that the awarded tender price was “significantly” higher compared to the average rent of about $9,800 per square foot for similar-sized clinics leased by HDB in 2024. It added that this was the highest per square foot rental bid the government had received for GP and dental clinics of that size to date.
Sun also mentioned that the average per square foot rent for HDB shops tendered out for medical facilities by HDB since 2020 were:
– $10.40 per square foot in 2020
– $10.00 per square foot in 2021
– $16.80 per square foot in 2022
– $17.50 per square foot in 2023
– $22.70 per square foot in 2024
– $28.50 per square foot in the first half of 2025
She also shared that for vacated HDB shop units in older HDB blocks, typically located in older estates, the average per square foot rent increased from $5.70 in 2020 to $11.40 in the first half of 2025. In newer housing estates, the average per square foot rent for shops in new BTO estates increased from $12.30 in 2020 to $39.30 in the first half of 2025. She attributed the difference in rental increase to the fact that those new leases are in newer residential areas that businesses consider to be more attractive.
Sun said that until recently, most shop units for GP clinics were let out purely based on price. To improve quality outcomes and reduce bidding pressure, HDB and MOH have started piloting a price-quality method in tenders for GP clinics since May. This pilot was deployed to award the tender for a GP clinic in Bartley Beacon, an 880-unit BTO project on Mount Vernon Road in the Bidadari estate. The project was launched during the November 2020 BTO sales exercise and was completed in June. The 1,076 sq ft GP clinic at Bartley Beacon was awarded to Bridgepoint Health, which submitted a monthly rent bid of $18,000 ($16.70 per square foot). The tender attracted 18 bids when it closed in May. According to Sun, the awarded rent was lower than the average awarded bid of $35.50 per square foot for designated GP clinic tenders in new housing projects awarded in the last three years.
She added that HDB applies a similar price-quality tender when it evaluates bids for the shops it leases. About 60% of the evaluation considers the quality of the operator, which includes aspects such as the company’s track record and community initiatives. Such tenders allow HDB to holistically evaluate both price and quality factors, instead of simply awarding the unit to the highest price bid.
HDB engages professional third-party valuers to assess the rent for the next period after each existing tenancy is due for renewal. This process considers recent rents of comparable properties in the vicinity, as well as prevailing market and local conditions. Sun said that under this approach, about 90% of shops leased by HDB have not seen an increase in rents over the last five years.
In comparison, the average rent for shops in new generation neighbourhood centres, new eating houses and new supermarkets recorded a “moderate” increase of between 1.3% and 3.3% per year over the last three years.
The government acknowledged concerns that sublet rents could increase more quickly than what HDB charges its main tenants. It said it would keep a close eye on the situation and look at better ways to keep the public and those affected informed.