Singapore’s Housing Development Board (HDB) may selectively acquire privately owned shops and increase its stock of directly rented units to address rental affordability, Senior Minister of State for National Development Sun Xueling told parliament on 24 September 2025.
She was responding to multiple parliamentary questions following media reports of steep increases in heartland rental rates, particularly for smaller units and privately owned shops.
MPs voiced concern that escalating rents could burden businesses and lead to higher costs for residents.
Sun emphasised that while HDB rents had remained broadly stable in recent years, privately owned shop rentals had seen sharp increases, more than doubling over the past year according to the Straits Times earlier in September.
Breakdown of HDB shop ownership
There are about 15,500 HDB shops across Singapore.
Of these, roughly 8,500 are privately owned, while 7,000 are directly rented out by HDB.
Sun noted that rental rates for privately owned units had surged, partly due to a greater proportion of transactions involving smaller spaces, which naturally fetch higher per square foot rates.
She also highlighted that about 740 privately owned shops were sold on 30-year leases, with more than 80 per cent of them having under 10 years left.
These units will progressively revert to HDB and then be re-let directly by the agency.
In addition, around 7,700 shops are on 99-year leases, with more than 30 years still remaining.
Since 1998, HDB has stopped selling shops to private owners and instead rents them directly to businesses.
Increasing HDB’s share of directly rented shops
Going forward, HDB will boost its overall supply of rental shops, with a larger proportion leased directly by the board.
“We will also inject new retail supply to meet demand in existing estates when necessary, including the option of selectively acquiring privately held HDB shops if needed,” said Sun.
Kebun Baru MP Henry Kwek asked if such interventions would be prioritised for essential trades such as cooked food stalls, where rental costs directly affect cost-of-living pressures.
Sun replied that the government had to allow market dynamics to function, as both landlords and tenants make independent business decisions. However, she said authorities would “take a more critical look” at essential services such as food and medical facilities, with acquisitions considered if supply was deemed insufficient.
Focus on medical services and the price-quality method
Sengkang MP Louis Chua welcomed the use of the Price-Quality Method (PQM) in awarding tenders for general practitioner (GP) clinics and asked whether it would apply to lease renewals and other healthcare trades.
Sun explained that the first PQM tender was awarded only in August 2025, and outcomes were still being studied.
Nevertheless, she said PQM would “more likely” be extended to more clinics, and all new GP clinics in HDB estates would adopt this approach.
She added that PQM already applies to dental clinics and other medical trades located in new neighbourhood centres.
High bids and rental escalation for GP clinics
Rental rates for HDB shop units tendered as medical facilities have risen sharply in recent years.
Average rent per square foot rose from S$10.40 in 2020 to S$22.70 in 2024, and S$28.50 in the first half of 2025.
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”.
Until recently, tenders were awarded solely on price.
Under the new PQM pilot, however, a GP clinic in Bartley Beacon secured a unit at S$16.70 per square foot.
This was markedly lower than the S$35.50 per square foot average seen in recent years for designated GP tenders in new projects.
Issues with privately owned shops
West Coast–Jurong West MP Ang Wei Neng asked under what circumstances HDB would consider acquiring privately owned shops.
He noted that owners often sought the highest rents possible, potentially resulting in an “undesirable business mix” such as moneylenders or spas.
Sun responded that direct acquisition of such units at high transacted prices would not be a good use of taxpayers’ money.
One possibility, she suggested, could be to selectively acquire surrounding shops to improve the balance of services in an area.
She reiterated that HDB rents are set by independent valuers, based on nearby market rates and prevailing conditions.
This approach has kept 90 per cent of HDB-rented shops stable without rent increases over the past five years. Average increases in the past three years were between 1.3 and 3.3 per cent annually.
Leader of the Opposition urges HDB to publish sublet rental data as early warning of rising cost pressures
Another issue raised was the lack of data on sublet rents. Sub-tenancy agreements are private contracts, and HDB does not collect such information.
Sun acknowledged concerns that sublet rents may rise faster than main tenancy rents and said HDB was exploring ways to provide more information.
Leader of the Opposition Pritam Singh argued that publishing such data could give a clearer indication of ground-level cost pressures faced by businesses and residents.
Sun replied that while HDB supports transparency, it must be careful not to interfere with market operations. She stressed that landlords and tenants must be allowed to make their own commercial decisions.
Sun emphasised that the government is committed to balancing affordability, essential service provision, and the realities of market dynamics.
She noted that HDB will continue to adjust supply and apply new frameworks such as PQM where appropriate, particularly for healthcare and food services.
The measures aim to ensure that neighbourhood shops remain accessible and sustainable for both businesses and residents.
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