HDB puts up five-room and executive flats for rent
FOR the first time, the Housing Board is putting up five-room and executive flats for rent through a private company.
On offer are 160 five-room and 90 executive flats in Jurong West, Sengkang and Bukit Merah.
Property agents say these are likely to be from the HDB’s stock of 9,000 unsold flats. In the past, it has only offered smaller units for rent through property companies.
The move to rent out bigger units came to light in a tender the HDB called last December for a contractor to renovate, maintain and rent out the 250 bigger flats for two years.
The tender includes 300 three-room flats in Boon Lay and Hougang.
The successful bidder must collect and pay rent to the HDB, keep the flats clean and attend to any tenant disputes or public complaints.
It will also be responsible for paying all town council service and conservancy fees, and utilities charges.
Each five-room and executive rental unit can take a maximum of eight occupants and these can be rented to anyone, except work-permit holders.
This means that while foreigners on student and employment passes may rent the flats, foreign construction and factory workers are barred.
The tender closed last week and drew just one bid above the HDB’s minimum rent of $320 a month per unit. HDB subsidiary EM Services put in a bid of $405.
The company and the HDB declined to comment as the tender has not been awarded yet.
Property agents expect EM Services to rent out the flats at the best price, pay the HDB $405 a month, and keep the difference as profit.
Mr Albert Lu, managing director of C&H Realty, said five-room flats in outlying areas like Jurong and Sengkang go for $700 to $1,000 a month, while those in a central area like Bukit Merah can fetch $1,200.
‘This means that the contractor will have some room to play with, even after factoring in renovation and furnishing costs,’ he added.
PropNex chief executive Mohamed Ismail was surprised to find 50 five-room flats up for rent in a popular, mature estate like Bukit Merah.
The HDB’s annual report for the year ending March 2005 said it had 19,488 one-room and 23,057 two-room units for rent, mainly to low-income households.
It also rented out 6,856 three-room and 702 four-room units, mainly to companies as workers’ housing.
MPs Amy Khor (Hong Kah GRC) and Teo Ho Pin (Holland-Bukit Panjang GRC) welcomed the latest move to rent out unsold HDB flats rather than leave them empty.
Dr Khor, chairman of the Government Parliamentary Committee for National Development, did not think it unusual that the tender drew a single bid. There is risk involved, she said, as the company must pay the HDB the rent even when there is no tenant for a flat.
‘HDB is probably testing the market to see if there is demand,’ she added. ‘It also needs to iron out any issues that come up before putting up more of these units for rent.’
Source : Straits Times - 1 Feb 2006
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