Written Answer by Ministry of National Development on considerations for location of commercial and coffee shop spaces within HDB developments, and efforts to keep food prices affordable given recent high sale transacted prices of coffee shops
Jul 5, 2022
3073. Assoc Prof Jamus Jerome Lim: To ask the Minister for National Development (a) whether there are household density considerations associated with the location of commercial and coffee shop spaces within HDB developments; and (b) if so, what are these conditions for (i) mature and (ii) new housing developments.
3077. Mr Sharael Taha: To ask the Minister for National Development with the trend of increased transacted prices of coffee shops (a) what measures will be put in place to ensure that the high transaction cost for coffee shops is not passed on to consumers; and (b) how will the Government ensure that the neighbourhood coffee shops continue to provide affordable food to residents.
3117. Mr Shawn Huang Wei Zhong: To ask the Minister for National Development (a) whether the Ministry tracks (i) the transacted prices of suburban coffeeshops against the prices of HDB flats and the median income of individuals staying within the same area and (ii) the average rental price per square foot of stalls in suburban coffeeshops against the median price of a cup of coffee sold in these coffeeshops; (b) if so, what is the data for the past 20 years; and (c) what are the measures taken to ensure affordability of food and drinks sold in suburban coffeeshops.
Answer:
1 There are presently over 770 HDB coffeeshops in Singapore. Some of these coffeeshops are sold and are hence privately-owned, while the rest are rented out by HDB. The two coffeeshops in Yishun and Tampines that were recently transacted at around $40 million each are amongst 400 coffeeshops which had been sold by HDB in the 1990s. The intent had then been to encourage private sector ownership in running these coffeeshops. Such privately-owned HDB coffeeshops are now transacted on the open market on a willing-buyer-willing-seller basis. Some buyers may be bullish about units at certain locations, and are hence willing to pay a higher resale price. The two coffeeshops at Yishun and Tampines are also large, with many stalls. However, such transaction prices are a minority. Since 2010, 70% of resale transactions of sold coffeeshops were at below $10 million. Resale volume is also fairly low, with an average of 15 transactions per year since 2010.
2 We are mindful of the need to ensure that residents have access to affordable cooked food options, and of the potential impact of such transactions, and have therefore put in place various measures over the years. One key measure is to ensure a good supply of coffeeshops in every HDB estate and town, so that there is healthy competition. These coffeeshops can also be run by social enterprises, for example NTUC Foodfare, to help keep food prices low. The market for F&B is highly competitive, especially in our heartlands. For example, the two coffeeshops at Tampines and Yishun are within neighbourhood centres that have five and seven coffeeshops respectively within a 400m radius, and residents hence have a choice of affordable food options there. Another example is the coffeeshop at Bukit Batok St 11 that was sold at $31 million in 2015. Today, residents in that area have the choice of six other coffeeshops within the vicinity. Despite the transacted price, it has been observed that food prices at the Bukit Batok St 11 coffeeshop are marginally higher, by 10 to 20 cents, and a cup of coffee is the same price as compared to other nearby coffeeshops.
3 HDB plans the provision of coffeeshops and other commercial amenities in new housing developments carefully, taking into account the number of dwelling units within the development as well as surrounding developments. The same approach is adopted for new housing developments in both mature and younger HDB towns. HDB also considers the residents ease of access to amenities by surveying the availability of existing commercial facilities in the vicinity. Most residents can access commercial facilities, such as shops and coffeeshops, within 400m walking distance or a 5- to 10-minute walk from their blocks.
4 HDB completed 34 new coffeeshops in the last four years, and continues to build new ones to serve new HDB developments. Another 30 coffeeshops will be completed in the next four years. Aside from coffeeshops, we also have over a hundred hawker centres in Singapore, and the Government is building more. Four new centres will begin operations this year, with another seven being planned or under construction.
5 Ultimately, consumers must be given the choice to go elsewhere. This applies to stallholders as well. If the rents set by coffeeshop owners are too high, stallholders could move to other eating establishments, resulting in vacant stalls and holding costs for the owners.
6 Since 1998, HDB no longer sells coffeeshops, and only rents them out. In 2018, HDB introduced Price-Quality tenders, with 50% of points assigned to the Quality of the operator, which includes aspects such as the availability of budget meals, good track record and community initiatives. Operators who successfully tender for HDB coffeeshops typically provide budget food options at every stall, with these priced at around $3. The rentals under Price-Quality tenders are also lower and more sustainable than under pure price bidding tenders.
7 Coffeeshops and food centres play an important social role in our HDB towns and estates, as they not only provide a convenient option for cooked food and drinks for residents, but also serve as key community hubs for families and friends to bond and connect over food and drinks. As such, HDB regularly monitors the resale market for HDB coffeeshops, as well as the prices of food sold in both sold and rental coffeeshops, and will not hesitate to review its policies to address affordability concerns where necessary.