Debated in Parliament on 14 Jul 2015.
Mr Gerald Giam Yean Song asked the Minister for National Development (a) whether the Government is concerned about the recent record price of $31 million paid for a coffee shop in Bukit Batok which follows the $23.8 million transaction in 2013 for a coffee shop in Hougang; and (b) what measures is the Government taking (i) to mitigate the downstream impact of such high transactions on stall rentals and the price of cooked food in those coffee shops; and (ii) to prevent property speculation in coffee shops which many lower income residents depend on for affordable food.
In the past five-and-a-half years, there were 32 resale transactions involving coffee shops: 10 were below $5 million, 12 between $5 and $10 million, eight between $10 and $15 million. The two transactions at Hougang and Bukit Batok were clearly outliers, but these were market transactions between private entities. If they miscalculate and overpay and, hence, need to charge above market rentals or food prices, they are at risk of losing their tenants or customers and may become insolvent.
We want our HDB residents to have access to affordable food. We do so through several means. First, HDB no longer sells its coffee shops; it only lets them out for rental. Second, we ensure a sufficient supply of coffee shops to maintain competition. For example, there are three other coffee shops near the transacted coffee shop in Bukit Batok and four other coffee shops and a new hawker centre next to the transacted coffee shop in Hougang. Third, HDB continues to build new coffee shops. For example, it will build 62 new coffee shops in the next three years. We are ready to further ramp up the supply if there is clear demand for it. In addition, NEA will be building 20 new hawker centres by 2027.
Madam, I have three supplementary questions. First, what is the Government's position regarding property speculation in eating houses in HDB estates? Does it take a laissez-faire approach that these are free market transactions between buyer and seller or is it willing to step in to prevent speculation altogether in HDB eating houses?
Second, to-date, what concrete ways has HDB intervened to prevent speculation and excessive price increases in the sale and purchases of HDB eating houses?
Third, would the Government consider requiring that HDB eating houses be sold back only to HDB when they are put up for sale so that HDB will have more control over rents and
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food prices at these eating houses?
Mr Khaw Boon Wan : Madam, the Member observed that there was speculation, using these two transactions. I doubt it because I checked the two cases. The seller of the Bukit Batok coffee shop had been there for 20 years before he sold it and the one in Hougang at least 10 years before he sold. So, these were clearly not speculators. In fact, they are operators. They actually operated the coffee stalls in the coffee shops.
What are the concrete ways? I thought that was explained in my reply.
Thirdly, could we force the shops to be sold back to HDB? I do not think, legally, I can do so.
Madam, I would like to ask the Minister whether he can look into having a hawker centre in Bukit Batok because we do need one and I think without the hawker centre, the only place that people go for food is that food centre that is now being sold for $31 million. So, I hope the Minister could work with NEA to give us a hawker centre in Bukit Batok.
Madam, I thought NEA has already announced that there will be a new hawker centre coming up in Bukit Batok.
Yes, probably that specific location would be good.
We will find a good location.
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