The Housing and Development Board (HDB) has announced a new measure requiring successful bidders for all new HDB shop tenders to commit to their tendered rent for six years, doubling the previous commitment period of three years. This change, which took effect on January 10, 2026, aims to encourage more prudent bidding and stabilize rental rates in HDB estates, where rental prices have been increasing significantly.
HDB explained in a media release that the extended commitment period is designed to discourage speculative bidding and to ensure reasonable stall rental rates. The new measure comes in response to concerns over rising rental bids, including a record-breaking S$52,000 monthly bid for a Tampines GP clinic, the highest per square foot rent for this type of commercial unit.
Concerns Over Rising Rental Bids Spark Policy Shift
The controversial high bid for the ground floor unit at Block 954C Tampines Street 96, placed by I-Health Medical Holdings in January 2025, was described by HDB as the “highest per square foot rent” it had ever received for GP and dental clinics of this size. This has raised alarm about escalating rental costs for shops in HDB estates, prompting the change in policy.
Under the previous system, HDB tenants only had to commit to a three-year tenancy. When the tenancy approached renewal, professional valuers would assess the new rent based on nearby comparable properties and prevailing market conditions. According to the Ministry of National Development (MND), which oversees HDB, 90% of HDB rental shops saw stable rents over the last five years, indicating that rental fluctuations had remained relatively controlled until recently.
The Impact on HDB Shop Tenants and Owners
As of August 2025, Singapore has approximately 15,500 HDB shops, with around 7,000 owned and rented out by HDB, while 8,500 are privately owned. HDB stopped selling shops in 1998 and now leases them directly to businesses. Rental rates for these privately owned shops are determined by their respective owners, and there has been a noticeable increase in per square foot rents, particularly among shops leased on 30-year terms.
Around 740 privately owned HDB shops, sold on 30-year leases, have less than 10 years remaining. These properties will eventually be returned to HDB and rented out again. The remaining 7,700 privately owned shops, which are on 99-year leases, have over 30 years left on their terms.
Moving Forward: HDB’s Retail Supply Plans
To address the growing demand for retail space, HDB will continue to provide new shops in public housing developments and inject new retail supply into existing estates when necessary. HDB also has the option of acquiring privately owned HDB shops selectively if required to meet market demand.
The introduction of the six-year commitment period for rental agreements is part of HDB’s broader efforts to stabilize the retail rental market while ensuring a sustainable and fair environment for businesses operating in public spaces.
