Why is a Singapore health clinic paying US$40,000 monthly rent?

A Singapore clinic defended its high rental bid for a public housing space, citing the area’s appeal, and said it expects to make a profit within two years

A healthcare firm clarified that its record high rental bid of more than S$52,000 (US$40,300) per month for a clinic space in a Singapore public housing estate was driven by the location’s appeal, sparking public debate over rental and healthcare costs.

Andrew Chim, co-owner of I-Health Medical Holdings, explained that the unit in Tampines – which has a monthly rent of S$52,188 – is located in an area where five Build-To-Order public housing estates are being developed, which will accommodate around 5,000 households. Additionally, there are plans for future developments, including a shopping centre.

Chim, 37, told the government-owned The Straits Times on Tuesday that these factors made the space the most appealing option among recent public housing units for general practitioner clinics.

He said consultation fees would still be comparable with clinics in similar estates, ranging from S$30 to S$35, and expects the clinic to make a profit in 1½ to 2 years.

Tampines is Singapore’s most populous public housing estate, with more than 240,000 residents as of March 2024, according to government data.

I-Health won the tender to operate the 50 square metre (538 square feet) ground-floor unit in March this year after bidding closed in January.

It plans to open the new clinic on June 26.

The unit’s eye-popping rent came to public attention on May 31 after healthcare practitioner Hisham Badaruddin posted about the bid on social media, calling the amount “obscene” for a clinic in a public housing estate.

Badaruddin’s post received numerous reactions on social media.

“52k is absolutely insane. It is double or triple the current market rate to rent in a populated HDB area. How do they even sustain?” wrote one user.

“In a closed bidding system, if he’s literally bidding twice the amount as the next person, then either he’s spoiling [the] market, or there’s something special about that location that guarantees crazy good business,” another comment read.

In March, a different clinic successfully bid S$25,388 for a ground-floor rental unit at another location in the Tampines area.

Nicholas Mak, chief research officer at property search portal Mogul.sg, told The Straits Times that demand for the unit was high, considering that clinics in Housing and Development Board (HDB) estates usually attract fewer than 10 bids.

Thirteen bids were submitted for the unit that I-Health Medical won with a bid of S$52,188.

Mak added that private landlords could use the high rentals in HDB commercial spaces as a benchmark to raise their rents.

“This will either force some retail operators out of business or force them to raise prices. The higher rentals will eventually be passed on to consumers as higher prices of the goods and services,” Mak said.

The HDB stopped the sale of shops in 1998. Shops sold to private entities made up 56 per cent of HDB’s commercial properties, and the remaining 44 per cent were rented out and managed by the public housing authority, the Ministry of National Development (MND) said in August 2022.

The average rent for clinics, including those for dental services, was S$7.88 per square foot in the second quarter of that year, the MND said.

According to the government, rental prices for HDB shops are generally lower than those for private rentals.