Historic Shophouses

· Buying A Property

Conservation Shophouses

Quaint, colourful and distinctive with their five-foot ways, conservation shophouses here offer rare investment opportunities and not just visual vibrancy to its localities. 

Singapore’s conservation shophouses are some of the nation’s most distinctive sights. These rows of colourful buildings, built between the 1840s and 1960s, serve as a reminder of Singapore’s rich heritage. 

Not only are these well-preserved historic structures visually striking, they are also becoming increasingly popular as locations for all sorts of businesses and offices as they ride on a deep nostalgia for simpler times. Conservation shophouses are also extremely popular as investment properties among local and overseas buyers. 

A treasured property class

Singapore’s conservation shophouses, with their colourful façades and intricate details, are terraced houses with certain distinctive features. The front of these mostly two- or three-storey buildings tends to be narrow and an iconic five-foot way is situated at the entrance, functioning as a corridor or sidewalk for pedestrians. Shophouses are found in blocks, with adjacent units sharing party walls.

Shophouses are generally used as retail or office spaces, or function as a combination of the two. Some shophouses have attached residential quarters. One popular configuration is to house retail or food and beverage functions on the ground floor while offices are situated upstairs.

Uniquely Singaporean architecture

Apart from their functionality, conservation shophouses are also highly attractive from a cultural and aesthetic standpoint.

Pre-WWII conservation shophouses are arguably some of Southeast Asia’s most recognisable sights. While shophouses are visible in other ASEAN cities like Hanoi and Penang, Singapore’s shophouses have architectural features that are unique to the island nation. The façades of conservation shophouses here reflect the design sensibilities of the different eras in which they were built.

Shophouses in Singapore are typically characterised by a courtyard in the rear. Windows often have timber frames and are built in the French or Casement style. Staircases are frequently made of timber, too, with some displaying intricately-designed balustrades.

To pedestrians, it is shophouses’ five-foot ways that are most recognisable. The upper floor of a shophouse extends over the five-foot way, creating a covered arcade that enables pedestrians to enjoy some respite from the hot sun and monsoon rains. This feature, mandated by Raffles in the First Town Plan during the British colonial period, was fittingly designed to protect pedestrians from the elements.

The majority of the buildings gazetted for conservation are shophouses and have been granted protection by law. The government’s plans to conserve historic buildings has led to the careful restoration of shophouses in some areas including Tanjong Pagar, Little India and Kampong Glam.

Maintenance of shophouses must be carried out according to guidelines set out by the URA to ensure their unique character continues to be preserved.

The timelessness of Singapore’s shophouses makes them an excellent investment option.

Investment potential of shophouses

Shophouses have been doing well as an investment class and were notable performers on the 2015 commercial property market. They are currently immensely popular for retail businesses and F&B operations, as many businesses bank on the nostalgia factor to attract customers.

Creative businesses like advertising firms, architectural firms and start-ups are also drawn to shophouses due to their attractive, cozy appearance vis-a-vis traditional office buildings.

With 50 caveats registered in H1 of 2015 and 54 in H2 of the same year, despite the more stringent Total Debt Servicing Ratio (TDSR) framework, demand for conservation shophouses remains high and sellers in the transactions that took place in 2015 continued to enjoy capital gains. A total of 86 shophouse transactions were lodged to the URA Real Estate Information System (REALIS) in the first ten months of 2016, with at least 13 conservation shophouse transactions in the Tanjong Pagar area. 

One notable example is a leasehold shophouse in the Duxton Hill area, which was purchased for $7 million in February 2013 before the new TDSR framework was put in place and was later sold for $9.4 million in November 2015, boasting a capital gain of 34.3 percent despite the new TDSR rules.

Another transaction involved a leasehold property along Genmill Lane, which was sold for $11 million in April this year after being bought for $5.8 million in 2012. The price appreciated by about 90 percent.

The above examples, however, pale in comparison to the sale of a conservation shophouse at 85 Tanjong Pagar Road. Bought for $3,900,000 in December 2010, it was sold for $8,350,000 in January 2014, an appreciation of 114 percent in just three years.

While the value of capital appreciation varies based on the type of shophouse, its location and its selling points, the amount of transactions and price appreciation witnessed in the shophouse market in the recent times prove that the generally weak sentiment in the property market here has not dampened the demand for and resilience of conservation shophouses.

Tanjong Pagar, an area to watch out for

Tanjong Pagar is strategically located in the CBD and enjoys excellent connectivity to the rest of Singapore. The shophouses imbue the area with a quaintness which is increasingly difficult to find in modern Singapore.

What makes Tanjong Pagar a particularly promising area is the fact that redevelopment plans are underway and are expected to rejuvenate the precinct in many exciting ways in the coming years.

At the center of the impending development of Tanjong Pagar is the newly-built Tanjong Pagar Centre. The mixed-use development, which contains office units, F&B and retail space, luxury residences and a luxury business hotel, is also home to the first two-storey urban park in Singapore.

Standing at 290 metres, making it Singapore’s tallest building, the 64-storey integrated development received its TOP in October this year.

Tanjong Pagar Centre is expected to set off a chain-reaction of new developments in the area as Tanjong Pagar makes the transition to being a lifestyle, commercial and residential centre. Other notable developments in the area include 100 AM Mall, various residential developments including SkySuites@Anson and Altez, hotels like Amara Hotel, Oasia Hotel Downtown and Carlton City Hotel, PS 100, and Maxwell Chambers. Plans are also underway to convert the nearby iconic Red Dot Museum, currently used as an exhibition venue on the ground floor and offices on the upper floors, into the Singapore International Arbitration Centre.

Tanjong Pagar is one of the few areas in Singapore where historic shophouses and high-rise buildings co-exist.

In addition, the government has plans to revitalise the area surrounding Tanjong Pagar, which will be turned into a zone called the Greater Southern Waterfront Area and feature a 30-kilometre trail which will link Gardens by the Bay to Labrador Park. Many new residential developments are expected, as well as a range of green spaces – adding vibrancy into the area and boost to businesses operating there.

Some properties to look out for include the conservation shophouses at 48-56 Peck Seah Street. These three pairs of two-storey shophouses with attics are highly sought-after, as conservation shophouses are extremely rare—there are only about 6,500 left in Singapore.

In addition, shophouses are free from the restrictions imposed on residential property transactions such as Additional Buyer’s Stamp Duty and Seller’s Stamp Duty. The properties, which are available for purchase from Phoenix Property Investors, are tenanted by well-known names like Kohler, a premium kitchen and sanitary ware company which leased two units for its flagship showroom and corporate office, and Fat Prince, a Turkish Café-by-day and Bar-by-Night restaurant. The properties’ strategic location, just a three-minute walk from Tanjong Pagar MRT station, will ensure that they preserve their returns as well as generate excellent capital appreciation over time.

The timeless charm of Singapore’s shophouses looks set to endure in the hearts and minds of the nation, making them an evergreen investment option.



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