SMEs want rules to ensure fair rents

[Bibi]

But food prices should be kept as affordable as possible

Then hawkers how? No pay increase??
Supermarket staffs?
Food processing industry??

If there are means to help the lowly paid wage workers to upgrade their skills for higher pay, the society should do it. If the skill set/productivity for the particular job is already at the limit, then we have to look into revising their salary or provide more subsidies for their work done.

I do not mind to pay 50cts for a clean toilet in hawker center. I do not mind either if the gov wishes to subsidise 30cts.

I also do not mind paying 50ct for a clean toilet. But I do mind out of 50ct, 30 cts went to landlord, 15 cents went to cleaning companies and 5 cents went to cleaners. Likewise, govt can subsidize 30 cts, but 20 cts went to back to LTA (from land price).
This is also why I hardly make any donations to charity organizations after the NFK fiasco as the bulk goes to the management rather than to the needy.

[Big Toe]

Onto the assignment of HDB shops. It does help in reining in the runaway speculative assignment prices but it does nothing to help a small business owner to start up/run a shop. Without the avenue of a greater pool of shops to assign, the new start up have 2 options to have the lowest cost retail space.

1. Bid for it(Think COE)
2. Rent from existing tenants. (plenty of sub tenant conditions apply)

With a smaller pool of available supply and plenty of demand, how can rental be affordable?
The whole system of property in Singapore is based on a market based/bidding system, there are some tweaks
in the HDB residential market where it is no longer pegged to market prices, but that's it. It is very much like the COE system.

Food prices are affordable in a number of hawker centres in Singapore(and can be tasty too), some areas do cost a fair bit more.
On one hand there are needy families that require assistance in food/healthcare/education. On the other hand, I witness with my own eyes some 'needy families' giving/throwing away cooked food that are donated to them as it did not taste good enough. And the volunteers thought they had helped the family by providing them with food. I have seen many family members smoke and waste money away. By all means helping needy families is a good thing but there is a need to go beyond that. We need to check if the family is really in need or deserve our help.

[Freenasi]

The concept of running the country so that it is profitable has a good intent. So in long run there will be lots of reserves and a lot of spare cash. But achieving the profitability by letting in too many foreigners and business that do not create jobs to locals, rsulting in over-crowding and escalating prices (houses, coes, healthcare etc), is something to ponder on.

[investor101]

Investor 101, $120K is considered a very very very reasonable transfer sum for a HDB shop house, especially if the location is ideal and rent is reasonable for the trade you are in. Coffee shops are transferred in millions. The alternative is to bid for it. I.e. paying $40K/mth for a 200sqm mini mart. No direct HDB tenant would quote a $10K transfer fee unless the rent is sky high and is in the worst of location. The cheapest standard HDB shophouse with less than desirable location/traffic cost an average of ard $2M to own and that's with limited lease left( At $2M, interest rate of 2.5%, we are looking at an interest of >$4K/mth).

Fact is that there is a decreasing number of HDB shops.(Old ones torn down, less new ones are built). HDB shops in general are a bargain compared to shopping centres and there is an assured catchment area. It is very very much sought after, especially the ones located in new towns. HDB shops are in fact, much more desirable than private estate shops due to the higher population density present in the heartlands. And the big retail players(i.e. supermarkets) are willing to pay a very high premium for suitable HDB shops.(in transfer fee/rental/ownership)

In any case I do not own any HDB shop.(But I wish I did) I do think that it is the only bright spot in the property market. Office/residential/industrial... can you see the avalanche of supply/waning demand? And the thing about retail space is this, there is just no alternative, a retail space is a retail space. You can't convert office/residential to retail even though it is somewhat possible for industrial space(ground floor) to somewhat serve as showroom/retail space.

Hi friend, thanks for the info. I am a newbie to property market. I was looking through my post again. When I said HDB shophouse, I was referring to small shop on ground floor, 3 room flat on the 2nd floor. Is that a HDB shophouse?

I was referring to this sort of property.

I didn't want to pay simply because the transfer fee only made me a tenant, and not a property owner. I still had to pay a monthly rent to HDB. Also, I intended to use the space for a business, and not sublet it out to someone else for an even higher rent.

Hope that clarifies. But thanks for the info about the property market.

[brattzz]

"ya investor101 actually we do that all the time. Selling our L99 house at inflated prices" -- specuvestor

Gov owns the house, we own the lease for 99 yrs!
Ouches! truth hurts!

[Big Toe]

Investor 101, many business owners understand where you are coming from, it does not make sense to pay
100-300K for a transfer but this is the current situation of retail space in Singapore. The high transfer fee does make the person an owner,
it gives the person " the right to be a tenant of HDB shop for $ X of rent for a specific number of years". Even paying $5-$6M for a tiny shop nearer a town centre does not make the person an owner. Chances are there is an average of 50-60yrs left on the leasehold, after which the property becomes $0. That's right, from $5-6M to $0. These values are not plucked from thin air, these are actual transactions and banks do value the properties at these prices.

A standard HDB shophouse refers to a shop the size of a 3rm flat(68sqm) with a 3rm flat upstairs.
And they are becoming smaller in size(for the newer estates) and without a residential unit upstairs.
And that's why it makes more sense to pay >$100K for the right to rent a larger space and probably lower rent.

And just for those who is thinking of setting up shop at a good location. You need money, lots of it.
A regular shop rentals are usually $XX,XXX at prime town centres. Even the yellow box is rented out for ard 2K/mth.
If you think this is bad, Hong Kong is even worse.

Disclaimer: I am not in the property trade but do have some knowledge of retail/industrial properties, local and in certain other countries.