Singapore’s 'shophouses' are catching the eye of the rich, with some forking out tens of millions
Who are some of the high-profile individuals that have purchased shophouses in Singapore?
Some high-profile individuals who have purchased shophouses in Singapore include Jack Ma's wife, Hong Kong actor Jackie Chan, Spanish tycoon Ricardo Portabella Peralta, and Bridgewater founder Ray Dalio. These individuals are among the rich and famous who are reportedly investing in Singapore's shophouses.
What are the characteristics of Singapore's "shophouses" that make them unique in the real estate market?
Singapore's "shophouses" are unique in the real estate market due to their distinct architectural style and historical significance. These two- to three-story buildings feature a shop on the ground floor with a residence on the upper floors4. They are known for their narrow frontages, high ceilings, and ornate details. Many shophouses also have a central courtyard known as an airwell, which provides natural light and ventilation to the interior spaces. Shophouses often showcase a mix of Chinese, Malay, and European design elements, reflecting Singapore's multicultural heritage.
These shophouses are also part of Singapore's history, serving as both commercial and residential spaces for over a century. Today, they continue to be an important part of Singapore's built heritage and are highly sought after for their unique charm and character. Many shophouses have been converted into trendy cafes, boutique shops, and stylish homes, contributing to Singapore's vibrant and diverse cultural scene.
In the real estate market, shophouses are considered finite gems, with only around 6,000-odd units available. Their conservation status means they cannot be replicated, making them attractive to investors as collector's items. Shophouses can be used or leased for various purposes, such as food and beverage, boutique retail stores, and family offices, offering flexibility to investors. Additionally, since shophouses are largely categorized as commercial properties, they are exempt from the higher fees imposed on residential properties, making them an appealing investment option.
How have the government's property cooling measures impacted the appeal of commercial shophouses in Singapore?
The government's property cooling measures have increased the appeal of commercial shophouses in Singapore. The measures, which included additional levies on locals purchasing second homes and duties on foreigners looking to buy any residential property, have made commercial shophouses more attractive as they are largely categorized as commercial and exempted from these higher fees. This has led to a surge in interest from high-net-worth individuals, with the sales volume of shophouses in the first quarter of the year increasing 52.2% from the previous quarter to S$169.1 million ($125 million). The limited supply and unique design elements of these conservation buildings make them an appealing alternative asset class or collector's item for investors.