Shophouses are a popular choice for many businesses for their shop frontage, and their heritage aesthetic if they are conservation shophouses. They are also usually located in areas with higher foot traffic and good accessibility. While we often see cafes and other shops operating out of shophouses, not all businesses can run in a shophouse.
So, what kind of businesses can we run from a shophouse?
Read Also: 6 Things To Know About Shophouses In Singapore And Why They Are So Expensive
Shophouses Are Considered Commercial Property Most Of The Time
In Singapore, shophouses refer to two types of buildings. The first type comprises freehold or leasehold shophouses that have been constructed in the early days of Singapore. According to URA, these buildings are constructed between 1840s and 1960s and are usually two to three storeys high. They look like narrow, small terraced houses with a sheltered ‘five foot’ pedestrian way in the front.
The second type refers to HDB shophouses. These are commercial units built by HDB as part of a neighbourhood estate. Typically, these units have a commercial shopfront, and sometimes residential quarters on the second floor.
Shophouses can be zoned as both commercial and residential and their use would be determined by their location and zoning. Potential buyers and renters of shophouses can check the allowable use through URA’s Allowable Use For Shophouses & Selected Commercial Properties. You can also check GoBusiness’s e-Adviser for Premise Use on whether your intended use of premises is allowed.
Check URA’s Allowable Use For Shophouses For The Different Allowed Uses
Let’s look at the shophouses along Tanjong Pagar Road for example.
Depending on the zoning and the current use, a shophouse may be pre-approved for certain business uses. For example, a shophouse that houses a restaurant should already be approved for restaurant use. Another restaurant planning to take over the unit will likely not need to seek approval again, though you may need to renew if the existing use was approved on Temporary Permission.
In this case, this unit’s first storey is allowed for restaurant. However, not all food-related services can operate here. You would need to submit a change of use application for Takeaway Foodshop (where there is no dine-in area). However, operating a Bar, Nightclub, Restaurant and Bar, Restaurant With Live Music/Performance is not allowed in this unit.
You can also submit a change of use for other non-F&B businesses for this unit. Typically, shophouses in the same area will have similar allowed uses, though the individual units may have different approved uses. In this instance, bars and nightclubs are disallowed in the shophouses along this stretch of Tanjong Pagar Road.
Do note that the different levels of a shophouse may be approved for different purposes. For example, the first storey of this shophouse does not allow office use. However, you can apply for change of use to use it as an office on the second floor.
Read Also: Change Of Use Of Property for Commercial Spaces – A Complete Guide For Businesses in Singapore
Change of Use Lodgment May Apply To First Storey Of Shophouses
Typically, applying for a Change Of Use or Renewal Of Use from URA costs $535. If you are intending to operate from the first storey of a shophouse, a Change of Use Lodgement may apply.
The lodgement scheme only applies to the first storey for shophouses on sites zoned as Commercial, Commercial & Residential or White in the Master Plan. It does not apply to the upper storeys. The uses eligible for lodgement are:
- Gym/Fitness Centre
- Pet Shop
- Laundromat
- Commercial School
- Community Use
- Office (if it is not in a location that requires activity-generating uses on the first storey of the building)
The advantage of the lodgement scheme is the cheaper fees and instant approval.
Application for Change Of Use Lodgement costs $160.50 (inclusive of GST).
Application for Renewal Of Use costs $535 (inclusive of GST).
Application for Change Of Use costs $535 (inclusive of GST).
Intended Business Use Can Be Approved Instantly Or Usually By 10 Working Days
Depending on whether your intended use is allowed, the application for change of use can take time.
Applications for Change Of Use or Renewal Of Use require the submission of documents including property/ unit owner’s letter of consent, floor plan showing the proposed layout and usage of premises (for Change of Use) and other supporting documents relevant to the proposed use, such as clearances from other Government agencies (if applicable)
Processing takes about 10 working days to assess Change Of Use or Renewal Of Use applications.
However, processing for Change of Use Lodgement is immediate with instant approval with the necessary supporting documents (i.e., owner’s written consent).
Read Also: Halal Certification For F&B Businesses: How To Apply & How Much It Costs
HDB Determines The Trade/Business Use For HDB Shophouses
For HDB shophouses, new commercial units are offered for tender by HDB.
Potential bidders can bid for commercial units in New Generation Neighbourhood Centres on the website. Each tender would state the unit and its permitted trade
Alternatively, they can bid for commercial units on HDB Place2Lease. The allowed use varies for the individual units. Some are for open trade, meaning that you can run any type of business as long as it is not on the list of excluded trades. Others are for specific trades such as medical clinic or hair salon.
HDB manages the list of allowed trades in each area to ensure a good mix of trades and services, thus it is likely that a unit up for tender would exclude trades that already exist in the area. For example, if there is already a laundromat in the area, it is likely that laundromat would be on the list of excluded trades.
For units with living quarters, these living quarters are most likely to be specified for residential purposes. Conversion to commercial purposes is subject to HDB and other relevant authorities’ approval as well as rental review.
For units let out for a specific trade/use, a change of use is not allowed, even for the subtenant or a takeover.
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