Written Answer by Ministry of National Development on average tenancy term of a HDB eating house and the number of eating houses tendered under the Price Quality Method

Feb 1, 2021

Mr Muhamad Faisal Abdul Manap: To ask the Minister for National Development (a) what is the average tenancy term of a HDB eating house; (b) how many eating houses have been tendered under the Price Quality Method to date; and (c) whether HDB keeps track of rent for individual stallholders with the operators of eating houses to ensure that the terms of the agreement between HDB and the operators are adhered to.

Answer:

To ensure that residents have access to affordable food options, HDB provides a good supply of eating houses across all HDB estates. There are 770 HDB-built eating houses at present, of which 402 are sold and 368 are under tenancy with HDB. HDB typically offers a tenancy term of 3 years, after which the incumbent operator’s tenancy may be renewed at the assessed market rent, subject to the absence of ground issues or infringements. This approach provides business continuity for operators, and minimises possible disruptions to residents.
 
Since September 2018, all new HDB eating houses have been let out via Price-Quality tenders. Transitioning to Price-Quality tenders has allowed HDB to ensure more sustainable rents, as tenderers need not drive up the tender price to secure a unit. Tendered rent under Price-Quality tenders has been lower on average compared to Price tenders previously. Price-Quality tenders also allow HDB to select tenants who can better serve residents, for instance, tenants with a good track record and productivity, who implement community initiatives, and who are committed to provide affordable food options. 

However, HDB does not control or keep track of rents between operators and individual stallholders as this is a private contractual agreement between the parties involved. This provides eating house operators with flexibility to negotiate with stallholders and allows operators to manage their own costs in terms of renovation, upkeep and other initiatives. At the same time, it is in the operators’ business interest to keep stall rents reasonable, to retain their stallholders. If the rents are too high, stallholders could move to other nearby eating establishments, resulting in vacant stalls.

Nonetheless, HDB continues to monitor the operators’ performance as well as ground feedback to ensure that the operators are managing the eating houses well. Should there be negative issues on the ground, HDB can review the tenancies of the rental eating houses at the end of their tenure.