MORE SUPPORT
Previously, HDB provided rental coffee shop operators a 5 per cent discount off their renewal rents for a period of one year from the time of tenancy renewal for participating in the budget meal initiative.
With adjustments to the initiative, the 5 per cent rental discount will be extended to the full three-year tenancy term.
The extended discount will apply to newly-let and existing rental coffee shops when they commence or renew their tenancies, if they choose to offer budget meals.
Existing rental coffee shops that are already offering budget meals will also automatically receive the discount for the rest of their current tenancy term, HDB said.
Operators of privately-owned coffee shops previously did not receive any funding support for participating in the initiative.
However, they can now receive a discount on their Temporary Occupation Licence fee for the outdoor refreshment area.
This is equivalent to 5 per cent of the assessed market rent of a coffee shop over a three-year period, capped at 100 per cent of the fee.
HDB said that operators who sign up for the initiative are required to pass on the discount in full to their tenants who are the stallholders providing budget meals.
“To ensure this, HDB will require operators to sign a letter of undertaking and declare how the discount is being shared amongst the stallholders who are offering the budget meals,” HDB said.
It added that it may cease and claw back the rental discounts if they are not distributed in full to participating stallholders.
In an FAQ page for the media, HDB said that there will not be a sudden change in the number of coffee shops offering budget meals, as most operators are not due for tenancy renewal.
Additionally, the tripled funding support to operators who offer budget meals will “encourage operators to participate in the scheme and offer budget meals on a sustainable basis”, HDB said.
HDB added that low-income households that require further assistance with cooked food may tap on support initiatives by their communities, such as meal vouchers, free breakfast and free bento lunches.
RENT TRANSPARENCY
HDB said it will start collecting data on stall rents charged by operators. This will help improve transparency and help stakeholders make better-informed decisions on rent.
Rental coffee shop rents have remained stable in the past three years, with 90 per cent of HDB coffee shops not seeing rent increases, HDB said.
“Nonetheless, there are concerns that some operators may impose high rental mark-ups on their stallholders, even though the rents these operators pay to HDB has remained largely unchanged,” it added.
HDB will assess how the data can be made publicly available after collecting the data.
Additionally, HDB will require successful bidders of all new shop tenders to maintain their tendered rent for two tenancy terms, or six years, instead of one tenancy term, which lasts for three years. This applies to all newly tendered HDB shops, and not just coffee shops.
“By requiring tenderers to commit to tendered rent over a longer period, our aim is to encourage tenderers to bid prudently.”
Source: CNA
