The allure of the Singapore shophouse goes beyond its architectural history and aesthetics or even its limited supply; ultimately, it’s about owning a part of Singapore’s history.


A treasure trove of historical assets are changing hands at record prices in Singapore. On 31st March 2018, the headline in Singapore’s Straits Times read: “8M buys shophouses, building for $82.5m.” That averages about SGD10 mil for each shophouse.

In land-scarce Singapore, landed properties are priced at a massive premium and this naturally applies to all shophouses particularly conservation or heritage shophouses.

Conservation shophouses are heritage buildings that were given conservation status by the Urban Redevelopment Authority of Singapore (URA), says Simon Monteiro, Associate Director at Savills Singapore specialising in heritage buildings. “There are about 8,900 estimated  buildings in primary and secondary areas that are gazetted. This means their façade needs to be maintained. For those located in the primary core areas such as Boat Quay, Amoy Street, Telok Ayer Street and Boon Tat Street, you can’t do much to them whereas you could still increase a few levels to 4-5 storeys for those in the secondary areas.”

Due to their very limited number, the heritage shophouses command an even bigger premium and are sought after by real estate funds, family offices, foreign companies specialising in design, finance, investment and business consultancy as well as Ultra High Net Worth Individuals (UHNWIs) – from Singapore and abroad.

Examples of funds include 8M Real Estate, Silk Road Partners, Clifton Real Estate & Arc Assets.

Heritage shophouses in Singapore are equivalent to rare vintage collectibles – they are collected due to their intrinsic historical and cultural as well as artistic value. There is also the advantage of staggering capital appreciation due to their limited quantity. “The high net worth buyers don’t buy them for rental returns because the return is dismal, falling from 7 – 8% back in the 1980s to about 2 -3 % these days,” Monteiro reveals.

The inverse relationship of skyrocketing capital appreciation to falling rental yield can be explained by the fact that there are comparatively many more buyers than tenants for these heritage shophouses. The high net worth buyers have the holding power and can keep the shophouses without even renting them out. Meanwhile, tenants are not as many due to the high rentals commanded by these soughtafter units. It takes a very profitable business to survive these rents.

During a survey in the tourist areas of Kampong Glam, Haji Lane and Arab Street where there is a proliferation of these heritage shophouses, Asian Property Review saw a handful of upper floor units being advertised for rental while there were none observed for sale.

Prices have been rising steadily in the last 10 to 15 years. In 2005, a 99-year leasehold in Duxton Hill area will cost about $380 psf. “Today, these streets are sought after and command prices above $2,000 psf based on the estimated built-up area of 3,500 sq ft to 5,000 sq ft” says Monteiro.

“I remember selling 3 assets in Duxton Hill in 2005 – 28 Duxton Hill and 20/21 Duxton Hill – for $6.1 mil for all 3; today you have to pay about 7 to 8 times as much” Monteiro continues.

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