Shophouse for Sale
Shophouse for sale in Singapore comes in many different forms. it can be broken down in the following categories. Conservation Shophouse, Strata Titled Shophouse, HDB Shophouse, Coffee Shop, Hotels and Hostels.
One of the reasons why shophouse for sale is attractive to investors is the absence of Addition Buyer Stamp Duty (ABSD). Buyers are exempted from paying the extra stamp duty imposed on buying residential property.
Another reason is there is no restriction on foreign ownership. Hence, family office and funds from overseas find this area an attractive option for their investment.
Conservation Shophouse for Sale
There are commercial conservation shophouses and residential conservation shophouses. Most of these properties can be found in the CBD, Little India, Kampong Glam, Geylang and Joo Chiat area. Although some can also be found in River Valley and Orchard area too.
Conservation shophouses are popular among commercial property for sale because they are rare. There are only about 6,500 such shophouses in Singapore. Owning a shophouse is like owning a history of Singapore. These unique buildings are constructed between the 1840s and 1960s. So it is not possible to find anything similar anymore.
Conservation shophouses are also allowed for multiple commercial uses in Singapore. Hence, it is easier to rent them out. Making this sector a more attractive investment option.
However, the downside of conservation shophouse are the upkeeping and maintenance. As these properties are already at least 60 years, Wear and tear are expected. URA also impose strict guidelines and regulation for the look and feel of these unique properties.
The average rental yield for these shophouses usually ranges from 2.5% to 2.8%. But most investors held a longer-term view for such investment.
Strata Shop Space
Besides the big shopping malls owned by REITs and bigger landlords, there are also a lot of strata malls in Singapore. Most malls are built as a mixed development with residential units in the same building.
These malls add as an extra shopping option especially bigger malls usually do not have smaller local shops as their tenants.
In the past, most people buy strata-titled shop for their own business. You can see many of these businesses still operating in People’s Park and Golden Mile. But many people buy strata-titled shop as a form of investment now.
Strata titled shop space allows start-up like cafe and bakery shop a chance to venture into the market. Most businesses in strata-titled shop space usually serve the local community. It is very common to see spa, enrichment centre, clinics and even banks in strata-titled shops.
Strata-titled shops are usually smaller in size, hence, making them more manageable and lower in cost. They also create a stable rental income in most cases. Rental yields are also more attractive after the estate they are in matures.
However, unlike bigger malls, you can’t control the tenant mix and that can cause rental to fall if your neighbour is a less desirable trade.
Other than strata title malls, HDB shophouse is another shop space investment option. Constructed in the early days to bring more convenient for the HDB dwellers.
Most HDB shophouses still plays a big part in everyday life. These properties are mostly found in the town centre of HDB estate. The business operating in these commercial properties varies from the beauty salon, convenient stores to tuition center. Some of these shophouses even have living quarters on the second level of the shop.
The coffee shop is also another important place in heartland Singapore. A large percentage of people have their meals in one of the coffee shops in their neighbourhood or working area. Hence, the coffee shop is also a very attractive shophouse investment.
There are a small group of people that invest in coffee shops. And these are usually the coffee shops owners themself.
This type of property can give you a higher rental yield but they are usually higher in their prices. They can be a risky investment if you can’t find vendors to fill up the space.
Hotels and Hostels
Another type of rare commercial property. This usually involves higher investment and also confined to a smaller group of investors. However, given Singapore as a popular tourist destination, hotels and hostels can be a very good investment property.
Commercial property investment may not be as straight forward as buying an apartment. There are many things to look out for. You must be well informed before making the decision.
If you are looking for more shophouse for sale or looking to sell your shophouse, contact us for more details now.