Opening remarks by Minister Desmond Lee at Launch of Heartlands Festival 2022 at Oasis Terraces
Nov 19, 2022
Mr Yeo Hiang Meng, President of the Federation of Merchants’ Associations,
My colleagues, Senior Minister of State Ms Sim Ann,
Merchant and hawker association representatives, partners, residents and friends
2. I am delighted to join you at the launch of our second Heartlands Festival 2022, and what a beautiful place to hold it – in one of the newer heartland precincts which bring convenience to residents. After a successful inaugural run in 2021, I am sure Singaporeans are looking forward to even more exciting activities this year, in our effort to bring more patrons and customers to our heartlands.
Introduction
3. The last couple of years have been tough years for everyone, especially as we fought the COVID-19 pandemic together. You would recall that we had to put in place safe management measures, including in our heartland shop areas, which impacted business and enterprises. On the part of the Government, we put in place schemes to help businesses tide over the difficult times. On the part of the merchants, you recognized the need for these measures. I would like to thank all of you, for making these sacrifices to keep everyone safe for the past 2 years.
4. COVID-19 also accelerated certain changes that were happening before the pandemic. Online shopping was already a trend before the pandemic hit. However, with the onset of COVID-19, many consumers started to shop online. First, as a matter of pragmatism and necessity, but now it has become very much a way of life. Once they got used to it, out of necessity, they said, well, why not continue something they feel very comfortable with. So heartland merchants had to tackle competition not just from malls, but competition from online shops, and as Mr Yeo Hiang Meng said, even competition from neigbouring countries, as Singaporeans now travel nearby and shop.
Heartland Shops Study (HSS) Findings
5. If shopping is now done at the click of a mouse and the goods are delivered right to our doorstep, then how can heartland shops continue to be relevant to our residents?
6. We recently conducted a Heartland Shops Study (HSS). Over 11 months, we consulted over 2,800 stakeholders, including residents, patrons, business owners, workers and merchants’ associations. We wanted to find out – what makes our heartland shops special to them? How can we transform our heartland shops to better meet the specific needs of residents in each locality?
7. I want, first and foremost, to thank all our participants for sharing your valuable insights with us. It enabled us to have a better understanding of your perspectives. There are a few clear conclusions from the study.
8. First, heartland shops have a very special place in the hearts of Singaporeans. To many Singaporeans, our heartland shops give the locality a certain character to reflect its heritage. They are a distinctive feature of our neighbourhood. Many residents are familiar with some shopkeepers who have been in the area for many years; some shopkeepers have probably watched them grow up over the years. Heartland shops are what makes this place Home.
9. Second, heartland shops play an important role in building communities that are inclusive. Participants told us that they valued HDB shops for providing essential products and services conveniently, at affordable prices. These shops also offer employment opportunities to a range of Singaporeans, including residents living nearby. One shop staff surveyed spoke about their strong relationships and connection with regular customers – customers-turned-friends.
10. Third, Singaporeans also hope that our heartland retail scene can be refreshed, revitalised, become more vibrant. While valued for their familiarity, residents also hope that the mix of retail trade can change and evolve as the needs of the local community change. Others hope that the mix of shops can be more interesting and more diverse. Yet others ask whether our heartland shops can serve as incubators for local entrepreneurs who are just starting out?
11. Overall, this study found that Singaporeans would like us to do more to make heartland shops more vibrant, respond better to the needs of the local community, and sharpen the local character by retaining certain shops or trades with heritage value.
Transforming Our Heartland Shops
12. But Singaporeans also recognize that we will not be able to achieve all of the above if we leave it entirely to the free market. For instance, if left purely to the market, old trades in the locality with a distinctive heritage value, such as traditional bakeries or local snack shops, may be edged out by trades that can pay a higher rental. In fact, I used to look after Jurong West Street 52, and there was a very long-standing bookshop there selling books, textbooks, and stationery. Many of the adults that grew up in the area remembered buying stationery and assessment books and all sorts of things from that shop, which unfortunately closed a few years ago, simply because of the sheer competition in the area. There was a lot of sadness in that happening, and this is replicated all over Singapore – I am sure you have your story to tell. There may also be an over-concentration of certain trades in a location, because these shops may be able to afford higher rentals. These trades may not even serve local residents, and instead draw their customers from other parts of Singapore – niche areas, for instance.
13. There is therefore a need for Government to work with local residents, Merchant Associations, shop operators and owners in order to better curate the local trade mix for the benefit of residents, while at the same time minimising disruption to the livelihoods of the shop operators.
14. In the 1980s and 1990s, if you recall, HDB sold shops to promote entrepreneurship and ownership of commercial properties, and provide business certainty for shop owners. But since the economic downturn in 1998, HDB discontinued the schemes for the sale of HDB shops. Since then, HDB has been renting out shops to businesses directly and works together with shop tenants and the local Merchants’ Associations to improve the vibrancy of the HDB shopping environment. Today, HDB has about 15,200 shops island wide, of which 6,700 are rental shops tenanted out directly by HDB, and 8,500 are sold shops owned by private landlords. Of the sold shops, 75% are sub-let to actual operators as opposed to operated by the landlords themselves. In general, HDB rental shop rents are far below private rentals.
15. Considering this context, and the shared vision we have formed together with Singaporeans, we plan to embark on transformation through a combination of policies, investment in upgrading the hardware, as well as investment in enriching the “software” through better placemaking. I will give you a few examples of what we are planning to do:
16. First, under the Our Heartlands 2025 initiative, EnterpriseSG has been helping heartland shops with digital adoption through the Heartlands Go Digital programme – I think it’s familiar to many of you. This is supported by HDB’s mobile application called ShopperLink, which enhances residents’ shopping experience by showing the deals, products and services available in HDB malls. We will continue to partner heartland Trade Associations to organise events to attract visitors to our heartlands. Today’s Heartlands Festival, and the events in the days to follow, is one such example.
17. Second, HDB and EnterpriseSG will work together to enhance the hardware and software of key heartland shop precincts. For instance, we will enhance the Revitalisation of Shops (ROS) scheme next year after we bring the amendments to the law through Parliament and get Parliament’s support. Under this scheme, HDB provides co-funding to help retailers improve the shopping environment and vibrancy of our town and neighbourhood precincts and centres. For example, through the upgrading of shopping corridors and shop façade improvement works; or carrying out promotional events to attract crowds. We intend to continue to review how we can further improve this scheme, even after this round of amendments, to make it more attractive and increase the take up rates from merchants. So let’s continue this conversation, and more will be shared in due course.
18. Third, in order to better serve residents’ needs, HDB will adopt PQM, or Price-Quality-Method, more widely as a tender process, in seeking new tenants of heartland shops. In fact, we already adopt PQM for HDB shops such as eating houses and supermarkets, but we intend to use this more widely. This will help us achieve more vibrant, inclusive and distinctive heartland shop precincts. For instance, affordability may be included as an important criteria in our HDB shop tenders, so that we ensure that food and other basic necessities continue to be affordable for our heartlanders, and not allocate our shops just based on the highest rental bid offered. Some of our local heartland shops offer distinctive goods or services. To better preserve shops with distinctive heritage character and value, we may also consider allocating more points to such shops with a strong local track record or heritage value. HDB is running commercial shops, but it is also really about society, it is about the heartlands, it is about affordability, it is about character. It is about more than just the commercial aspect of commercial shops.
19. Fourth, HDB will take the opportunity of the end of the leases of sold shops, to refresh the trade mix in various precincts. There are shops sold on 30-year leases, which will progressively reach the end of their lease periods, over the next twenty years or so. After the shops are returned to HDB upon the expiry of lease, HDB will re-tender out these shops on a tenancy term – that means to follow the rest of the HDB shops That is, we will convert these returned shops to shops that will be rented out on a shorter tenancy period, such as three years. This will allow us more opportunities to refresh the trade mix, to better serve the needs of residents. In this digital age, the needs of our residents would have changed a lot over a 30-year period. In fact, we see huge changes to the retail scene just over the two and a half years of the pandemic. So letting out shops on a three year tenancy, on a renewal basis, allows us more opportunities to review and see if the trade mix continues to be relevant and serves the needs of local residents.
20. We will do this gradually, because the expiry of leases will happen over several years. For existing shop owners, rest assured that HDB will be in touch with you well ahead of the lease expiry, to advise you on your options. HDB intends to offer an interim tenancy of at least one year, or more, to these shop owners, when their leases expire. This is, of course, subject to redevelopment plans for the area. During this period, HDB will already start the tender process for the shops, and existing owners and operators can also prepare to bid for the tenancy of their shops, if they want to continue to operate the shop. The offer of an interim tenancy period of at least one year will also minimise service disruption to residents, help ease the transition for existing shop owners from a 30-year lease to a tenancy term arrangement, like every other HDB shop, and enable HDB to better manage the pace of shops changeover and PQM tenders.
21. Fifth, we are reviewing our schemes to see how our HDB heartlands can better incubate local start-ups and entrepreneurs that are trying out new and innovative models of services that may benefit residents in our heartlands. At the moment, we set aside retail spaces for allocation to aspiring entrepreneurs for their start-ups in our shopping centres such as Oasis Terraces, where we are today, and Northshore Plaza. In response to some of the insights from the Heartland Shops Study, there is room for us to see how these can be extended to more commercial areas.
22. Sixth, we also want to better enable persons with disability to find work near their home. Currently, HDB supports social enterprises and our SMEs who have inclusive hiring practices – that means they hire inclusively, including persons with disabilities. We support them by directly allocating some commercial spaces to these businesses and providing them with a 20% rental discount. We are looking at how we might be able to improve this scheme to increase take-up and create more inclusive job opportunities for persons with disabilities.
23. Allow me to say a bit of what I just said, in Chinese.
24. 大家好！很开心今天可以和大家参与这个活动。
25. 政府希望和居民、商会、业主和店家合作， 把邻里商店打造得更有活力、更能满足社区的需求，同时也凸显社区的本土特色。
26. 国人了解，要让我们的邻里商店更具特色、活力和包容性，单单靠市场力量是不够的。例如，一些富有传统特色的老行业，像传统面包店或小吃店，可能因为无法跟那些有能力支付更高租金的行业竞争，而被淘汰。所以政府必须跟居民、商会、业主和店家合作，为居民提供更好的商店组合，同时尽力减少对店家生计的影响。
27. 我们将双管齐下，在硬件和软件方面加强，为我们的社区环境注入新活力，为社区添彩。
28. 首先，新加坡企业发展局在 “2025邻里新天地” 的 “邻里企业数码化计划” 下，协助邻里商店使用数码科技。 企发局也会加强与邻里商会的合作，举办促销活动吸引人流到邻里商圈消费。
29. 第二，建屋局和企发局将携手合作提升邻里商店区的硬件和软件。建屋局会在明年国会修法后，强化目前的商店提升计划 (ROS)。
30. 第三，为了更好地满足居民的需求，建屋局将更广泛地使用“价格-品质”的投标方式 (PQM)，为邻里商店招标。目前一些邻里商店，如咖啡店和超级市场，已经采用“价格-品质”的投标方式。比如，为了确保食品和生活用品的价格能继续维持在居民负担得起的水平，我们为商店招标时，将重点考虑商品的经济实惠性，而不是只把商店出租给最高标价。
31. 第四，出售店面的店契到期后，建屋局会利用这个机会更新各区的商店组合。一些以30年店契出售的店面将以较短的契约，如3年，出租， 就像建屋局其他的店面一样。
32. 我们将一步一步进行，因为店契会分好几年到期。目前的店主请放心，建屋局会在你们的店契到期前，和你们商讨接下来的选项。除了已经敲定更新计划的社区，建屋局打算为店契到期的店主提供为期至少1年的过渡期契约。
33. 这除了能减低因服务中断而对居民带来的不便，也让目前的店主从30年店契慢慢过渡到租约店契的安排。
34. 第五，我们也将检讨现有的政策，让我们的邻里能更有效地培育本地企业和企业家，鼓励他们尝试推陈出新的服务模式，造福我们的居民，跟上时代潮流。建屋局目前已经为有潜力的企业挪出商业空间让他们大展拳脚。我们会探讨如何将这些措施推广到更多商圈。
35. 第六，我们希望能让残障人士更容易在住家附近找到就业机会。目前，建屋局为社区企业分配商业空间并给予它们两成的租金折扣。我们在探讨如何改善这项计划，以鼓励更多商家的参与，为残障人士制造更多就业机会。
36. 政府希望与商会和居民携手合作，确保我们的邻里商圈能做好准备，迎合社区未来的需求，实现我们建造一个富有活力、具本地特色的邻里商圈的愿景。
Conclusion
37. Ladies and gentlemen, as we emerge stronger from the pandemic, the Government wants to work hand in hand with both the merchants’ associations as well as our residents, to ensure our heartland shop precincts are future ready. Already before COVID-19, they faced so much competition. COVID-19 has accelerated some of these trends, and intensified this competition. But our heartland shops and our heartland merchants are core and essential to the character of Singapore’s heartlands. We must make every effort in partnership to protect this, to enhance this, to grow this, and keep our heartlands relevant to the next generation of heartlanders, including our young. Heartland shops are a uniquely Singapore heritage, but we can also do a lot more to refresh, transform and make them more vibrant, exciting and relevant to the changing needs of residents. We need to work together – change mindsets, support our merchants, and help them to continue to play this important role.
38. I would like to thank all residents, patrons, business owners and workers for your active participation and valuable contributions to the Heartland Shops Study. We can feel that everyone cares and wants to co-create this exciting future together, and paint an exciting future for what shopping in the heartlands means. As Government, we are committed to taking an active role in supporting of our enterprises, to make our vision of endearing, vibrant, exciting and inclusive heartland shops with local character a reality.
39. I have announced quite a few things, but under the guidance of Ms Sim Ann and Mr Yeo, and many of the partners working together – both government agencies and trade associations – let us continue this process. Let us continue to engage and reach out; let us not be afraid to make bold changes, so that our heartlands continue to be that social anchor, to continue to provide affordability, to continue to provide assurance to heartlanders of Singapore today and into the future.
40. I wish you all an enjoyable Heartlands Festival 2022! 祝大家邻里节快乐！