Record sales of Hougang and Bukit Batok coffeeshops 'clearly outliers': Khaw
SINGAPORE — There were 32 resale transactions involving coffeeshops in the past five and a half years, with 10 pricing below S$5 million, 12 between S$5 and S$10 million, and eight between S$10 and S$15 million.
Minister for National Development Khaw Boon Wan shared these figures today (July 14) in Parliament in response to a question filed by Non-constituency Member of Parliament Gerald Giam. He had asked whether the Government was concerned with the record sale price of S$31 million for a coffee shop in Bukit Batok, and whether authorities are mitigating the impact of such high transactions on stall rentals and food prices.
The record sale of the Bukit Batok Street 11 coffeeshop hit headlines last month, with tenants reporting that their rental agreements with the new landlord had risen at least 10 per cent.
The sale beats the previous record set in 2013 for a coffee shop in Hougang Avenue 4, which was sold for S$23.8 million.
Mr Khaw said the transactions at Hougang and Bukit Batok “were clearly outliers” and were market transactions between private entities.
“If they miscalculate and overpay and hence need to charge above market rentals or food prices, they are at risk of losing their tenants or customers and may become insolvent,” he said.
Mr Khaw said they ensure residents have access to affordable food through several means, such as ensuring a sufficient supply of coffeeshops to maintain competition.
For example, there are three other coffeeshops near the transacted coffeeshop in Bukit Batok, and four other coffeeshops and a new hawker centre next to the transacted one in Hougang. The HDB will build 62 new coffeeshops in the next three years, and they “are ready to further ramp up the supply if there is clear demand for it”, he said, adding that there will also be 20 new hawker centres by 2027.
Furthermore, the HDB no longer sells its coffee shops but only lets them out for rental, added Mr Khaw.
Asked by Mr Giam what the Government’s position is regarding property speculation in coffee shops, Mr Khaw said he doubts the two transactions involved speculation.
Pointing out that the seller of the Bukit Batok coffeeshop had been there for 20 years before he sold it, while the seller in Hougang had been there for at least 10 years, he said: “These were clearly not speculators, in fact they are operators - they operate the coffee stall in the coffeeshop.”
The Today Paper/ S'pore Published on Tuesday, 14 July 2015 By Joy Fang Record sales of Hougang and Bukit Batok coffeeshops 'clearly outliers': Khaw