In Singapore, commercial spaces also include shophouses. Shophouses are wonderful alternatives to high-rise office towers as they have historic value and tend to attract businesses in the creative industries like architectural firms, design houses and publishing houses. In addition, their rent is much lower compared to high-rise office buildings which helps attract young start-up companies.
Due to their limited number, buying shophouses in good locations such as the Duxton Road and Ann Siang Hill areas are savvy investment strategies, as they tend to show great capital appreciation. Shophouses in Singapore are generally owned by distinguished families and are considered a family heirloom. Some financial institutions classify shophouses in Singapore as an alternative investment class.
If you are looking to acquire a shophouse for such use, you will first need to check the Urban Redevelopment Authority’s (URA) conservation website (http://www.ura.gov.sg/conservation/conservation.htm
) to check if the shophouse fulfills certain requirements like conservation, restoration and plot ratio. You can check if the shophouse that you are planning to acquire has been conserved under the areas and maps listings (http://www.ura.gov.sg/conservation/mod2.htm
). If it has not, then you need to check the conservation and restoration guidelines governing shophouses.
Basically, the conservation areas in Singapore fall into four distinct categories and the conservation guidelines vary for each of these categories. The four categories include historic districts, residential historic districts, secondary settlements and bungalows. The following is a breakdown on the four districts and their description as laid down by the URA.Historic Districts
The four Historic Districts are Boat Quay, Chinatown, Kampong Glam and Little India. Most of the buildings in these areas are still intact, and the entire building has to be retained and restored. Residential Historic Districts
For the Residential Historic Districts of Blair Plain, Cairnhill and Emerald Hill, a new rear extension lower than the main roof can be built for greater flexibility in adapting the building for modern living. Secondary Settlements
Geylang and Joo Chiat are examples of Secondary Settlements where there are already many new developments. In these areas, the streetscape is to be retained and a new rear extension up to the maximum height allowed for the area can be built. Bungalows
For bungalows, only the main house needs to be kept. The outhouse can be demolished to make way for new extensions to the main house. Large sites can be subdivided for additional new developments. For a site where a flat or condominium housing development can be built, the bungalow can be used for residential purposes or as a clubhouse to serve the development.
As a rule, researching for such information on the URA’s website provides great resource material if you need to do some general market research before buying a commercial property, especially on the rules and regulations governing conservation guidelines and mapping. However, such information is better geared for investors who are looking to buy it for residential use, as it does not contain all the information on commercial properties.
For commercial purposes, it is best for you to engage an agent that specialises in such properties as they are well versed in the nuances relating to such usage. A good agent will be able to brief you on the different loan eligibility requirements for foreigners and locals. In addition, they will be able to dispense useful advice on how you can maneuver such costly issues such as GST and Stamp Duty without breaking the law. GST is a very important consideration before acquiring such properties, as it can be quite substantial since shophouses are million dollar properties.