Encouraging entrepreneurship, supporting shop owners with upgrading works,

extending more help for social enterprises, and providing more affordable food options for residents

         At MND’s Committee of Supply debate today, the Senior Minister of State for National Development Sim Ann announced a slew of initiatives to enhance the vibrancy of our HDB heartlands.

2        Heartland shops are an integral part of the daily lives of many Singaporeans. The Heartland Shops Study, which concluded last year and involved over 2,800 stakeholders, found that Singaporeans see heartland shops as key activity nodes that inject vibrancy and build inclusiveness in their neighbourhoods. Heartland shops also provide the community with affordable goods and services. Those surveyed also hoped that our heartland retail scene could be refreshed, revitalized and made even more vibrant.

Revitalising Neighbourhoods and Supporting Heartland Shops

a) Encouraging entrepreneurship through the Enhanced Entrepreneur Scheme

3        The Entrepreneur Scheme was first introduced in 2018 to encourage start-ups or existing businesses with innovative and productive business models to set up businesses in HDB’s new generation neighbourhood centres (NCs) by allocating them HDB shop spaces at these NCs.

4        HDB will work with Enterprise Singapore to enhance the Entrepreneur Scheme by identifying promising and innovative entrepreneurs to set up businesses in the heartlands and assessing their eligibility to do so. This will help to refresh and boost the range of goods and services offered in HDB estates. 

5        To encourage promising start-ups to set up shop in our heartlands, more support will be provided to budding entrepreneurs. Eligible start-ups will benefit from a 10% rental discount for their first 3-year tenancy. They will also be allocated HDB shop spaces beyond new NCs. This will allow start-ups to operate from more HDB shop spaces, included those located in existing NCs and precinct clusters. (Refer to Annex A)

b) Enhancing the Revitalisation of Shops (ROS) scheme

6        To enhance the vibrancy and competitiveness of HDB shops, HDB provides co-funding to help retailers carry out improvement works at the common area under the Revitalisation of Shops (ROS) scheme. The ROS was recently enhanced in January 2023, to allow upgrading to proceed with a minimum of 75% support from retailers (down from the previous requirement of 100% consensus), so more shops are able to take-up and benefit from the scheme.

7        HDB will further enhance the ROS scheme to support retailers in upgrading their shopping environment by reducing their co-payment portion. Currently, shop owners co-fund 20% of the upgrading costs, capped at $5,000. HDB and the Town Council co-fund the balance 70% and 10% respectively, capped at $30,000 per sold shop.

8        With the additional co-funding support, shop owners will now co-pay 5% of the upgrading cost, down from 20% previously. HDB will correspondingly increase its co-funding share to 85%, up from 70%. The total budget for upgrading works will remain unchanged at $35,000 per shop.

9        To encourage shop owners to carry out shopfront improvement works in tandem with ROS upgrading, HDB will also introduce a new funding category for optional works. HDB will co-fund 80% of the costs, capped at $3,000, for shop owners who opt to carry out improvements to their shopfronts, such as installing vertical blinds or roller shutters, while their precinct undergoes ROS upgrading. (Refer to Annex B)

Building Inclusiveness in the Heartlands

c) Providing more assistance for social enterprises and businesses with inclusive hiring practices

10       HDB also plays a part to promote inclusiveness in the heartlands by providing affordable shop spaces for new or growing social enterprises. Currently, eligible social enterprises^[1] and businesses with inclusive hiring practices^[2] can apply to be allocated a shop space and benefit from a 20% rental discount for the first 3-year tenancy.

11       To provide more support for these enterprises, HDB will increase the rental discount from 20% to 30% for a 3-year tenancy, and upon renewal, extend the rental discount for a subsequent 3-year tenancy. Up to 30 shop spaces will also be made available for direct allocation each year, double the current 15 units.  (Refer to Annex C)

Providing more Affordable Meal Options

d) Increase budget meal options in more HDB coffee shops

12       To ensure that residents have access to affordable meal options, HDB provides a good supply of coffeeshops across all HDB estates. Since 2018, new HDB coffeeshops have been let out via Price-Quality Method (PQM) tenders. This has allowed HDB to ensure more sustainable rents, as Price-Quality Method tenders are reviewed holistically based on a range of criteria beyond rent alone, such as affordability considerations. Compared to the e-bidding system before, the PQM tenders have reduced rental rates for new coffee shops by an average of 27% since its implementation in 2018.  In addition, tenderers who bid for new HDB rental coffeeshops must provide budget meals at six stalls as well as a budget drink as an affordable option for customers.

13       To provide more affordable meal options for residents, we will be extending the budget meals requirement beyond coffeeshops let out via Price-Quality Method tenders. From May 2023, all rental coffeeshops due for renewal will also need to provide four budget meals and two budget drinks, as a condition for renewal of their tenancy. This means that budget meals will progressively be offered at all 374 rental coffeeshops by 2026, up from the current 72. To ease the transition for coffeeshop operators and stall holders, HDB will be offering a small rental discount of 5% off the market valuation-based renewal rents for a period of one year, from the time that the new budget meals/drinks requirement is in place.  (Refer to Annex D)

Supporting Heartland Shops to Meet Residents’ Needs

14       HDB shops play an important role in the community by providing residents with convenient access to essential goods and services. They also serve as a social node for residents to mingle and enhance the vibrancy of the heartlands. HDB will continue to support heartland shops to ensure that they continue to meet the needs of residents.