HDB HEADQUARTERS (Vacation of Bukit Merah building)

Dr Chong Weng Chiew asked the Minister for National Development (a) whether the Housing and Development Board (HDB) Headquarters' move to Toa Payoh was well conceived as the vacated building in Bukit Merah is still unoccupied; and (b) as retail businesses in the Bukit Merah Central area are suffering as a result, whether HDB had anticipated the loss of business and planned possible measures to revitalise the area.

The Minister of State for National Development (Dr Vivian Balakrishnan) (for the Minister for National Development): Mr Speaker, Sir, HDB decided in 1995 to move to Toa Payoh. There are several reasons for this decision. To provide better comprehensive and integrated services to its customers, to improve working conditions for its staff as there was a severe space shortage at the previous office at Bukit Merah; and, finally, to facilitate the comprehensive redevelopment of Toa Payoh.

HDB has appointed five marketing agents to lease out the premises at the previous office at Bukit Merah. In view of the current economic situation, HDB expects the demand in the short term to be weak. Nonetheless, HDB will continue to actively market the vacated premises.

The overall HDB retail sector has not been spared the problems that the local retail sector has faced over the past few years. These problems include a weak external demand due to the regional economic slowdown, leakage of spending by Singaporeans going overseas and keen domestic competition with the emergence of new shopping malls and hyper markets. The business of the eating establishments and the retail shops at Bukit Merah had also, to some extent, been affected by HDB's relocation to Toa Payoh, although they are still quite well patronised by office workers from the nearby Henderson Industrial Park, CMPB and SPRING. HDB will try to rent out the vacant retail premises to other retailers who complement the existing trades and who have a regional demand. In this way, we hope to increase human traffic and therefore have a positive spillover effect on the businesses of the existing shops.

Dr Chong Weng Chiew (Pasir Ris-Punggol): Two supplementary questions, please. If one is to buy a new house, it will be seen logical and prudent to make sure that the old existing house is either being rented out or sold. So would it be seen as illogical and not too prudent in this context? The second question is what is the loss in rental revenue where HDB is experiencing at the moment for the past two months as a result of the vacancy?

Dr Vivian Balakrishnan: The Member is quite correct that, obviously, there is an interest on the part of the owner of the building to ensure that it is rented out. However, this is a free market economy and all of us who have ever been in a situation of having to rent out our property will know that we cannot guarantee that there will be uninterrupted stream of tenants queueing up outside our door. The decision to move was made in 1995, seven years ago. At that point, things were obviously different. But even now, the real issue is: is HDB trying to lease out the vacant premises? We have appointed five marketing agents, and I am sure all of them are equally incentivised to find the right tenant mix for these premises. So it is not a question of HDB just sitting back and leaving it vacant because it can afford to leave it vacant. That is not the case at all.

I do not have the figure that he is asking for as to how much it is losing over the last few months. In a sense, he also has to realise that, in a free market economy, the rental yields will fluctuate from time to time. So if you ask me, even if I were to give him a figure now, it would be an entirely notional figure. The proof of the pudding ultimately is how much whoever is going to come in to these premises is willing to pay. And we hope that, over the next few months, we will find a tenant, or several tenants, who will take up the vacant premises.

Dr Chong Weng Chiew: May I ask the Minister of State whether the old HDB headquarters in Bukit Merah Central has two towers and three podiums with an area of 7,000 sq ft and looking at a rental rate of $1.50 per sq ft per month, and this works out to be almost a rental income of $1 million per month? So is that figure worrisome when it is left vacant for the past few months and we do not know what would happen in subsequent months?

Dr Vivian Balakrishnan: Mr Speaker, Sir, whether that figure is $1 million, or $1, it would still be a concern on the part of HDB and of the Government. The real question is: are we trying to lease out these premises? And the answer to that question is yes. Exactly how much it would be, the market will say. When someone will move in will depend also on the market. So there is a limit to how much we can try to flog a dead horse. In this case, the premises are not dead. The premises, as he quite correctly pointed out, are useable premises. And in due time, tenants will move in and they will pay a good market rate. When that happens, the shopkeepers who are in that vicinity will also experience an increase in their business prospects.

Dr Chong Weng Chiew: One final question. Has the Ministry explored the option of inviting GLCs, or even other Government authorities, such as the Land Transport Authority, to house their headquarters there?

Dr Vivian Balakrishnan: We have certainly explored all the options that he has mentioned. Anyway, we hope this will also be part of the advertisement. Those of you, whether you are a GLC, private company, or any other business, who wish to use the premises at the old HDB headquarters, please apply.

Mdm Cynthia Phua (Aljunied): Mr Speaker, Sir, I would like to take this opportunity to appeal to all relevant authorities, especially statutory boards and LTA, that when they want to vacate such large developments or shift bus stops, they should consider the impact of such action on the community. Like in this case itself, HDB has two or three blocks and the impact on the shopkeepers in the community is really very serious. In my case, they shifted a bus stop ---

Mr Speaker: What is your question, Mdm Phua?

Mdm Cynthia Phua: They shifted the bus terminal which has also an impact on the community around it. So I ---

Mr Speaker: What is your question then?

Mdm Cynthia Phua: We would like the relevant authorities to consider the interest of the community and its impact on the community when they decide to shift such developments in the neighbourhood centres.

Dr Vivian Balakrishnan: Is that a question?

Mr Speaker: She asked you to consider. You consider then?