Wednesday, February 6, 2013

HDB may allow 'non-approved' uses for its shops

Applications to operate such trades are assessed on case-by-case basis

The Straits Times
February 5, 2013

BUSINESSES that would normally be relegated to industrial parks may be able to set up shop in retail space managed by the HDB.

A Housing Board spokesman told The Straits Times recently that "when there is a request to operate trades not considered as among the approved uses, we will assess the applications on a case-by-case basis".

She added that the "specific nature of the businesses and their impact on the surrounding shops and residents" would be looked at. "We also need to ensure that these areas already have a sufficient number of shops offering a wide variety of trades to meet the daily needs of residents."

Self-storage operator Store Friendly, a major chain from Hong Kong that set up here in December 2011, is one firm that could benefit from the policy.

Managing director Jes Johansen told The Straits Times last week that the company approached the HDB in January last year to enquire about leasing shop space.

"They want to evaluate each application but they are receptive," Mr Johansen said, noting he had met HDB "a couple of times" last year to discuss the proposal.

"There may be cases where they may not support it for whatever reason" but after essential businesses such as pharmacies and food outlets are put in place "then we would have a fair bite of the apple", he added.

Mr Johansen said that unlike most other self-storage firms, which set up shop in large warehouses, Store Friendly aims to open many small franchised outlets in the heartland, similar to convenience store chains.

"I look for properties that allow me to get on their doorstep ... underneath where people live. We also have a retail element in that it needs to be nice and clean. Customers won't come here if it's too industrial," he noted.

Store Friendly has six outlets, all on industrial-zoned land, paying up to $1.70 psf per month in rent. It hopes to pay $1.80 to $1.90 psf per month for HDB retail space.

Rents at HDB shops located farther from town centres or main transport nodes average $3 to $4 psf per month while more centrally located ones can cost $5 to $6 psf.

Suburban mall rents are much more expensive at $13 to $15 psf per month, or even $30 psf for prime units.

Knight Frank senior manager Alice Tan said suburban retail space rents are likely to increase 2 per cent year-on-year at most due to a manpower crunch and the weak economy.

Mr Johansen said high rents and low vacancy rates made it difficult to find HDB shop space for Store Friendly to lease, which was why he approached the board directly to "see if they can include it in their planning".

The HDB said it had told Store Friendly that it "would need to rent or buy shop space from existing shopkeepers".

It noted that it generally did not allow storage or industrial trades to operate in its commercial units, and has not received any applications from industrial operators to rent commercial premises in the past two years.

But it did not automatically rule it out, saying: "Such applications, if received, would be assessed on a case-by-case basis."

Mr Johansen added that he has been in tentative discussions with HDB since last year about potentially leasing unused land for temporary self-storage buildings and expects to receive a list of "opportunities" from the HDB soon.

"We are not at all concerned if the space is commercial or industrial; we are simply focused on getting the right storage product at the right place and that means as close as possible to the end user," Mr Johansen said.

An HDB spokesman said: "We are not working directly with Store Friendly... All HDB commercial and industrial properties, as well as land, are let out by public tender via an e-bidding system."

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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