New Support Measures for Coffee Shop Operators

In a move to support coffee shop operators, the Housing and Development Board (HDB) has introduced extended rental discounts aimed at those participating in the budget meal initiative. This new approach not only benefits existing operators but also encourages participation among newly-let establishments.

Extended Rental Discounts

Previously, HDB offered a 5% rental discount on renewal rents for a period of one year to coffee shop operators engaged in the budget meal initiative. However, adjustments to the initiative now allow this discount to be applied for the entire three-year tenancy term.

Both newly-let and existing rental coffee shops can access this extended discount upon starting or renewing their tenancies, provided they opt to offer budget meals. Furthermore, already-established coffee shops that are currently serving budget meals will automatically receive this discount for the remainder of their current tenancy term.

For privately-owned coffee shops, which previously had no funding support for participating in the initiative, there is now good news. They can enjoy a discount on their Temporary Occupation Licence fee for outdoor areas, equivalent to 5% of the assessed market rent over a three-year span, up to 100% of the fee.

HDB has stipulated that operators taking part in the initiative must fully pass on the discounts to their stallholders who provide budget meals. To ensure compliance, operators are required to sign a letter of undertaking, outlining how the discounts are shared among their participating stallholders. HDB has also noted that failure to distribute the discounts may result in the clawback of the rental concessions.

According to HDB, the changes will not abruptly increase the number of coffee shops offering budget meals, as most operators are not near the end of their tenancy renewals. The enhanced funding support aims to encourage more operators to participate in offering budget meals sustainably.

Additionally, low-income households seeking assistance with cooked meals can explore community initiatives such as meal vouchers, free breakfasts, and complimentary bento lunches.

Enhancing Rent Transparency

In an effort to improve transparency, HDB will begin collecting data on stall rents charged by operators. This initiative is designed to provide stakeholders with better insights for making informed decisions regarding rental agreements.

Over the past three years, rental prices for coffee shops have remained stable, with 90% of HDB coffee shops not experiencing any rent increases. Despite this stability, there are concerns regarding potential high rental mark-ups imposed by some operators on their stallholders, even though the base rents paid to HDB have largely remained unchanged.

HDB plans to evaluate how this collected data can be made available to the public. Furthermore, successful bidders for new shop tenders will now be required to uphold their tendered rents for two tenancy terms, or a total of six years, as opposed to the previous three-year term. This policy applies to all new HDB shops, not just coffee shops.

By extending the commitment period for tendered rents, HDB hopes to encourage more prudent bidding by tenderers.