Investors Snap Up Centuries-Old Shophouses in Singapore

With their terracotta roof tiles, French-style timber windows and brightly-colored facades, Singapore’s distinctive shophouses are becoming the latest sought-after property asset for family offices, tycoons and real estate funds.

Dating to the 18th century, the two-to-three story buildings have fetched up to S$40 million ($30 million) this year, with the per-square foot price surging as much as 40%, according to Knight Frank LLP. After Singapore lifted its two-month lockdown in mid-June, shophouse deals rose to S$175.1 million in the third quarter from S$117 million the previous quarter, according Savills Plc.

With just 6,500 remaining, the rarity and heritage value of shophouses also appeal to investors. They provide higher rental yields and capital growth than residential property, and can be converted to offices, restaurants, boutique hotels and even high-end co-living spaces.

“Shophouses have a premium because of their aesthetic beauty,” said Loyalle Chin, an associate director at PropNex Realty, who specializes in shophouse sales. “It’s like a collector’s item because there aren’t many of them.”

Built by Chinese immigrants who settled in Singapore in the 1700s, the original style was simple -- two storeys, with one or two windows on the upper floor, which served as a residence. The ground floor was used for business, where they sold goods like coffee or sugar.

As the merchants’ wealth increased, the shophouses became grander. Brightly-colored ceramic tiles with oriental designs lined exterior and interior walls, and columns and arches were added for a more imposing look. However, when Singapore’s economic growth took off in the late 1960s, developers started to tear them down, before in 1973 the government moved to conserve the buildings, with some designated as national monuments.

Among the advantages for investors, shophouse rent yields range between 1.6% to 2.5%, compared with 1% to 1.9% for residential property, said Chin. The buildings can be leased to multiple tenants, with a restaurant or retail outlet at street level and office space on the upper stories. Some have been turned into boutique accommodation like Chinatown’s Porcelain Hotel, and others converted to luxury co-living residences, with rooms costing up to S$4,000 a month.

Nor do shophouses attract the additional stamp duties for overseas investors levied on residential property. Last year, almost three-quarters of buyers were foreigners, led by investors from China, Hong Kong, Indonesia and South Korea.

“They are deemed as core assets due to their central locations, static supply and stable cashflow,” said Christine Li, head of research for Southeast Asia at Cushman & Wakefield.

In the biggest deal this year, Aw & Sons Capital, a Singapore-based boutique developer and family office, paid S$39 million for four shophouses about 10 minutes from the Orchard Road shopping strip. Another shophouse located in the financial district sold last month for S$29.8 million, while another in the area is for sale for at least S$30 million.

“We still see the shophouse market to remain resilient and buying interest to remain stable,” said Yap Hui Yee, director of investment sales and capital markets at Savills in Singapore. “It’s still a preferred asset class for property purchasers, particularly high-net worth individuals and family offices.”

Subscribe to our YouTube channel

Bloomberg Quicktake brings you live global news and original shows spanning business, technology, politics and culture. Make sense of the stories changing your business and your world.

To watch complete coverage on Bloomberg Quicktake 24/7, visit or watch on Apple TV, Roku, Samsung Smart TV, Fire TV and Android TV on the Bloomberg app.

Connect with us on…

Breaking News on YouTube