Oral Answer by Ministry of National Development on record transaction price of coffee shop
Jul 14, 2015
Mr Gerald Giam Yean Song: To ask 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.
Answer:
Since Jan 2010, there were 32 resale transactions involving eating houses of comparable sizes: 10 were below $5 million, 12 between $5 and $10 million, 8 between $10 and $15 million. The two transactions at Hougang and Bukit Batok were outliers, but these were market transactions between private entities. If they overpay and need to charge above market price, they risk losing their customers and becoming insolvent.
We want our HDB residents to have access to affordable food. We do so through several means. First, HDB no longer sells its eating houses; it only lets them out for rental. Second, we ensure a sufficient supply of eating houses to maintain competition. For example, there are three other eating houses near the transacted eating house in Bukit Batok, and four other eating houses and a new hawker centre next to the transacted eating house in Hougang. Third, HDB continues to build new eating houses. For example, it will build 62 new eating houses in the next 3 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.