{"id":13430,"date":"2025-06-08T07:00:00","date_gmt":"2025-06-07T23:00:00","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=13430"},"modified":"2025-06-07T16:12:48","modified_gmt":"2025-06-07T08:12:48","slug":"52188-a-month-for-a-gp-clinic-in-tampines-should-the-government-be-worried","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/52188-a-month-for-a-gp-clinic-in-tampines-should-the-government-be-worried\/","title":{"rendered":"$52,188 A Month For A GP Clinic In Tampines. Should The Government Be Worried?"},"content":{"rendered":"\n

Unlike residential properties, commercial properties in Singapore have generally been left to operate more freely under market forces. For instance, while private residential property transactions may be subject to the Additional Buyer\u2019s Stamp Duty (ABSD)<\/a>, this does not apply to commercial (or industrial) properties.<\/p>\n\n\n\n

Since 2009, at least\u00a015 property cooling measures<\/a>\u00a0have been\u00a0<\/span>implemented for the residential market. In contrast, commercial properties have faced far less regulatory intervention.<\/p>\n\n\n\n

In our view, this difference stems from the typical use and ownership of commercial properties. They are primarily acquired by businesses or institutional investors\u2014whether it\u2019s a REIT acquiring a shopping mall, or a developer operating their own retail spaces\u2014where the tenants are usually other businesses. The underlying assumption is that businesses are better equipped to assess market risks and manage their commercial real estate investments without needing the same level of government intervention as the residential market.<\/p>\n\n\n\n

At the same time, it would be na\u00efve to assume that higher operating costs for commercial properties, whether from higher purchase prices or rising rental rates, have no impact on end consumers. In land-scarce Singapore, rental costs, like labour costs, are a significant expense for any brick-and-mortar business. It is reasonable to expect that higher rental costs will, more often than not, translate into higher prices for consumers. That said, the reverse may not always hold true and lower rents do not necessarily lead to lower consumer prices.<\/p>\n\n\n\n

This is perhaps why when news broke that a business, I-Health Medical Holdings, tendered $52,188 a month for a 560 square feet location at Tampines for a General Practitioner (GP) clinic, Health Minister Ong Ye Kung expressed dismayed at the bid<\/a>. He said, \u201cthis must translate to higher cost of healthcare one way or another, and negate the effort of Ministry of Health, Singapore (MOH) to try to keep the cost of primary healthcare affordable.\u201d<\/em><\/p>\n\n\n\n

On the other hand, Mr Andrew Chim, co-owner of I-Health have defended the bid<\/a> (something I think he didn\u2019t need to), explaining that the location was attractive given that it\u2019s in the middle of Tampines, in the midst of five BTO projects with 5,000 households, as well as other upcoming developments like a new mixed-use project and a shopping mall. He also said that consultation fees will range from $30 to $35, comparable to those of other heartland clinics.<\/p>\n\n\n\n

Should the Government Intervene?<\/h3>\n\n\n\n

While businesses may not always make perfect decisions, it would be unfair to suggest that their bids are illogical. After all, companies do not stay in business by consistently making poor choices. If a business places a high rental bid, it\u2019s reasonable to assume they are confident in their ability to generate a positive return from it. This is, in essence, how the free market operates.<\/p>\n\n\n\n

However, the question raised by Minister Ong Ye Kung is a valid one: are these high rental bids ultimately made at the expense of consumers?<\/p>\n\n\n\n

Suppose businesses pass on high rental costs to consumers through increased prices without any significant value-add in terms of innovation or quality in treatment. In that case, consumers bear the brunt of these business decisions. While it\u2019s true that consumers have a choice, their options may also be limited, especially in residential areas where alternative clinics or service providers may not be conveniently located.<\/p>\n\n\n\n

Government intervention can take many forms. A relatively light-touch approach would be to increase competition by allowing multiple GP clinics to operate within the location, particularly in growing estates like the new precincts in Tampines. As the clinic owner who won the bid suggested, the area is expected to see a high influx of residents. Similarly, The Straits Times reported<\/a> a GP clinic at Block 235B Tengah Garden Walk (another new BTO development) renting at $40,888, further suggesting that there is a strong demand and perceived value for GP clinics in new estates.<\/p>\n\n\n\n

On the other hand, directly capping rental prices might be less desirable. Doing so would require the government to step in and override market-based decisions, potentially undermining the principles of a free market.<\/p>\n\n\n\n

A more balanced solution may lie in the upcoming Price-Quality evaluation Model (PQM) that Minister Ong mentioned. This model shifts the evaluation criteria away from being price-centric to include other factors such as care quality, preventive health initiatives, chronic disease management and mental wellness. By broadening the basis on which tenders are awarded, PQM could help ensure that public interest, not just price, guides decision-making.<\/p>\n\n\n\n

Time will tell if such a solution proves more effective for Singapore in the long term.<\/p>\n\n\n\n

Read Also: Rent Hikes: Why Landlords Are Not Always To Be Blamed<\/a><\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"Should commercial properties be regulated in Singapore similar to that of residential properties? \n","protected":false},"author":4,"featured_media":13431,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[364],"tags":[474,353,601,1760,2278,1068],"yoast_head":"\n$52,188 A Month For A GP Clinic In Tampines. 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