WHY investors buy Shophouse in the first place?
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. For more information, you can study this book by Julian Davison https://www.bookdepository.com/Singapore-Shophouse-Julian-Davison/9789810597160
It has investment value. Why does anyone want to buy something that does not add value to their portfolio? Shophouses are a consistent favourite 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.
But before we invest in a shophouse, let us firstly 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 can buy the Pink Zoning Areas (Mixed Residential and Commercial). That is Singaporeans and Permanent Residents.
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/ 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 brings life to the neighbourhood. Most interesting in Singapore are zones and areas where you see lively eateries and pubs suitable for nights out with friends. Although it does make living near these locations a bit rowdier, but it is also for this precise lifestyle that people want to live near such convenience and enjoy the chillax ambience and company.
Take a walk at Tanjong Pagar, exactly right in front of the highly coveted rental Condominium, The Clift (located at McCallum Street); there are rows of Shophouses that are always full of vibrant restaurant goers. This is the same for the shophouses at Keong Saik Road, near the Premium HDB icon, called The Pinnacle at Duxton (located at Cantonment Road). These Residential properties near to iconic shophouses sought after by 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!