HDB does not seek to maximise rental collections, says Chee Hong Tat
National Development Minister Chee Hong Tat clarifies that the Housing and Development Board prioritises quality and community affordability over high rental yields, maintaining a low vacancy rate of 1.6 per cent across its commercial properties.
- The Housing and Development Board (HDB) uses a Price-Quality Method (PQM) that weights quality at 60 per cent for specific commercial tenders.
- National Development Minister Chee Hong Tat stated that HDB does not prioritise the highest bidders or the maximisation of rental collections.
- The overall vacancy rate for HDB rental shops remained low at 1.6 per cent throughout 2025.
SINGAPORE: HDB does not seek to maximise rental collections or maintain high rental benchmarks, and it does not always award tenders to the highest bidder, National Development Minister Chee Hong Tat said.
He noted that HDB adopts the Price-Quality Method (PQM) for coffee shops and supermarkets, where 60% of the evaluation score is based on quality factors such as affordability, a good track record, and community-centric initiatives.
Chee was responding to parliamentary questions filed by Workers’ Party MP Dennis Tan in a written reply on 6 March 2026.
Tan asked whether prolonged vacancies in HDB-managed commercial properties are treated as a loss of public value. He also asked how HDB evaluates the trade-off between maintaining higher rental benchmarks and ensuring sustained occupancy and neighbourhood vibrancy.
In a separate question, Tan asked whether HDB has defined vacancy thresholds, duration benchmarks, or other objective triggers that would prompt a review of rental pricing for its commercial properties. He also asked what these benchmarks are, if they exist.
In response, Chee said that in managing the HDB rental shop landscape, the agency focuses on achieving sustained occupancy and maintaining an appropriate tenant mix.
This ensures that residents in HDB estates have convenient access to amenities and services.
When vacancies arise, HDB assesses the trade required for the space.
Where a change in shop trade is deemed necessary to optimise the neighbourhood’s tenant mix, HDB will carry out the necessary reconfiguration works before calling for tenders.
Rather than setting specific vacancy thresholds or duration benchmarks, Chee said HDB puts vacant units up for tender as soon as possible to minimise inconvenience to residents.
Vacancy rates for HDB rental shops are generally low. In 2025, the overall vacancy rate stood at 1.6%, according to Chee.
Concerns rise over record-breaking HDB coffee shop rents and impact on F&B operators
In September 2025, former food and beverage operator Khoo Keat Hwee voiced similar concerns related to record-breaking HDB coffeeshop tenders, warning that such bids risk becoming “new rental norms” that push food prices higher across estates such as Tampines North, Punggol, and Bidadari.
He described the trend as “unsustainable” for both residents and business operators.
Veteran food critic and hawker culture advocate KF Seetoh also raised concern over unsustainable coffee shop rents in HDB estates, called for a “serious rethink” of rental policies, arguing that HDB had become “complicit in raising the cost of living” by enabling coffee shop sales and tenders to reach staggering figures.
The impact has not been limited to coffee shops.
A traditional Chinese medicine practitioner recounted losing a bid for a Sengkang shoplot after offering S$4,700 for a 527 square feet unit, only to be outbid at S$14,000 by a dental clinic.
Similarly, in June, a S$52,188 bid for a general practitioner clinic in Tampines prompted Health Minister Ong Ye Kung to describe the sum as “dismaying”.
In response to rising concerns, the Ministry of Health and HDB introduced a PQM framework in May 2025.
