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WHY investors buy Shophouse in Singapore?
It has heritage value; the architecture is unique and represents the various times of development of the country where early migrants came to Singapore and started the trading business in this small uniquely positioned hub. Most Shophouses carry a certain flair and era of style. There are five broad styles, namely the Early (1840s), Transitional (1900s), Late, Art Deco (mid 1900s) and Modern.
It has investment value. Shophouses are a consistent favorite asset choice amongst the Ultra High net worth individuals, the foreigners, investors, and institutions, even during the Covid19 lock down period, Shophouse transactions increased dramatically. Tenants love the iconic styles, and it is not hard to see a hip café, an office, a Designer firm, a wedding gown company, and even a drinking pub located at Shophouse locations with F&B licenses.
Before we invest in a shophouse, let us understand a bit more about Shophouse Zoning.
Zoning is how the government categorize a plot of land. We can derive the eligibility, commercial use and stamp duty treatment that comes with it.
For example, locals (Singaporeans and Permanent Residents) can buy the Pink Zoning Areas (Mixed Residential and Commercial).
As for Light Pink zones, besides Buyer’s Stamp Duties (BSD), Buyers also pay Seller’s Stamp Duty (SSD) and Additional Buyer’s Stamp Duty (ABSD). This is because this zone is for Residential purposes.
Next, there is a variety of allowable business usage for shophouses in Singapore and it may include Services like Vet Clinic / Pet Shop, Massage services, DIY Laundry, Hardware shops, Commercial School, Gym, Religious use, Food and Beverage etc. The business type allowed directly affects your rental yield.
Lastly, Shophouses bring life to the neighbourhood. You will find the most interesting eateries and pubs for night outing with friends. Although it does make these locations a bit rowdier, but it is also for this precise lifestyle that people want to live nearby so as to enjoy the convenience and ambience.
For e.g., situated in front of The Clift (a condominium located at McCallum Street); you will see rows of Shophouses that are always full of vibrancy. You also see the same case for the shophouses at Keong Saik Road, near the The Pinnacle at Duxton (located at Cantonment Road). These Residential properties appeal to the young, hippy, and trendy Millennials. Look at my raw videos on my YouTube.
Lastly, do check out Boat Quay for all those Back packers’ hotels, Various restaurants to savour the Singapore Chili Crab, and Pubs, Coffee Joints in those shophouses. It is indeed a rare icon to own in land scarce Singapore.
Contact me at 90098981 today to discuss more!