A practical guide to buying, leasing, and investing in Singapore commercial, industrial, and shophouse properties — written for first-time buyers, foreign investors, and SMEs who want straight answers before they enquire.
The Basics
What counts as “commercial property” in Singapore?
In everyday usage, commercial property covers four broad categories, each with its own zoning and rules.
- Office — CBD towers (Raffles Place, Marina Bay, Tanjong Pagar), city-fringe (Paya Lebar, Novena), and suburban office blocks.
- Retail / F&B — ground-floor units in malls, shophouses, and standalone retail buildings.
- Industrial (B1 / B2) — flatted factories, ramp-up warehouses, and business parks. B1 is light industrial; B2 allows heavier processes with higher pollution thresholds.
- Shophouse — conservation and non-conservation shophouses across Chinatown, Tanjong Pagar, Little India, Joo Chiat, and Tiong Bahru. Often mixed-use (commercial on ground floor, residential or office above).
Can foreigners buy commercial property in Singapore?
Yes — commercial and industrial property is generally open to foreign individuals and foreign-incorporated companies without restriction under the Residential Property Act. There is no Additional Buyer’s Stamp Duty (ABSD) on non-residential property, which is one of the major reasons Singapore commercial assets are popular with overseas investors.
Exceptions to watch: a small handful of shophouses with residential URA classification, and mixed-use buildings where part of the gross floor area is residential — those portions may still attract ABSD or require government approval.
Freehold vs 99-year, 60-year, and 30-year leasehold — what’s the difference?
Most CBD office towers are 99-year leasehold from the State. Many shophouses in conservation areas are 99-year, 999-year, or freehold. Industrial property is typically 30 or 60-year leasehold from JTC.
Tenure directly affects bank financing (lenders tighten loan tenors as remaining lease shortens), exit value (a 30-year industrial unit with 8 years left is a depreciating asset), and JTC approvals (industrial sales need JTC consent and may have anchor-tenant conditions).
Stamp Duty, GST and Costs
Do I pay ABSD on commercial property?
No. ABSD applies only to residential property. Commercial, industrial, and pure non-residential shophouses attract only Buyer’s Stamp Duty (BSD) at the standard tiered rate:
- First S$180,000 — 1%
- Next S$180,000 — 2%
- Next S$640,000 — 3%
- Next S$500,000 — 4%
- Next S$1,500,000 — 5%
- Remaining amount — 6%
For a S$3M commercial unit, that’s roughly S$124,600 in BSD. Mixed-use shophouses split the calculation between the residential and non-residential portions.
Is GST charged on commercial property?
Yes. Sale and lease of commercial property are subject to GST (9% from 2024 onwards) if the seller or landlord is GST-registered. Many corporate sellers are GST-registered, so factor this into your gross outlay. Buyers who are themselves GST-registered can typically claim back the GST as input tax — one of the structural advantages of holding commercial under a GST-registered company. Residential property is GST-exempt, so this is a key cost difference vs buying a condo.
What about Seller’s Stamp Duty (SSD)?
Industrial property attracts an Industrial SSD if disposed of within 3 years of purchase (15% / 10% / 5% in years 1 / 2 / 3). Commercial office, retail, and shophouse property currently have no SSD — you can flip without holding-period penalty (though capital gains may still attract income tax if IRAS considers you a trader).
Financing and Holding Structure
How much can I borrow for commercial property?
Commercial loans are not subject to TDSR in the same way as residential. Banks typically lend up to 80% LTV for individual buyers and 70–80% LTV for company purchases, depending on the asset, tenure, and cashflow. Interest rates are usually 0.5–1.0% above residential equivalents.
Industrial JTC properties have stricter rules — some require an anchor tenant and at least 6 months of operations before resale.
Should I buy under personal name, Pte Ltd, or a property-holding company?
Both work. Key trade-offs:
- Personal name — simpler. Rental income taxed at personal marginal rate (up to 24%).
- Pte Ltd — flat 17% corporate tax (effectively lower with start-up exemption), input GST claimable if registered, easier succession via share transfer. Stamp duty on share transfer is much lower than property transfer.
For long-term hold and rental, Pte Ltd usually wins. For a short flip, personal name is cleaner.
Leasing — Tenant and Landlord Questions
What is the typical commercial lease term in Singapore?
Standard market lease is 2 + 1 or 3 + 3 years — a fixed term with a renewal option. Anchor tenants and big-floor-plate offices often negotiate 5 + 5. Shophouse F&B and retail tenancies are commonly 3 years with a CPI-linked review or fixed bump at renewal. Most leases include a 1–3 month rent-free fit-out period for new tenants doing renovation.
What rental rates should I expect?
Rates vary widely by location, building class, and floor. As of mid-2026 indicative ranges (gross, per square foot per month):
- Prime Grade A CBD office — S$11.00 to S$14.50 psf
- City-fringe office — S$6.50 to S$9.50 psf
- Business park — S$5.50 to S$7.50 psf
- Flatted factory (B1) — S$1.80 to S$2.80 psf
- Ramp-up warehouse (B2) — S$1.40 to S$2.20 psf
- Conservation shophouse retail — S$8.00 to S$18.00 psf (heavily location-dependent)
These are headline asking rates — effective rates after rent-free periods and fit-out incentives often land 8–15% lower. Always ask for the effective rent, not just the headline.
What are service charge and outgoings?
On top of base rent, tenants in managed buildings pay a service charge covering air-con, cleaning, security, lift maintenance, and common-area lighting. Typical ranges:
- Prime CBD office — S$1.20 to S$1.80 psf/month
- City-fringe / suburban office — S$0.80 to S$1.20 psf/month
- Flatted factory — S$0.30 to S$0.60 psf/month
Always ask whether quoted rent is gross (inclusive of service charge) or net (you add service charge on top). The difference materially changes your real cost.
Can I sublet?
Subletting always requires the landlord’s prior written consent. Many leases prohibit sublease entirely or restrict it to related-corporate-entity use. JTC industrial properties have additional sublet restrictions — you typically can’t sublet more than 30–50% of GFA, and the sublessee must be in a compatible industry.
Industrial and Shophouse Specifics
What is the difference between B1 and B2 industrial?
B1 permits light industrial uses with limited noise, vibration, smoke, smell, dust, or effluent — suitable for clean assembly, R&D, software, light food production. B1 buildings can usually have ancillary office and showroom space.
B2 permits heavier industrial uses with stricter pollution and safety controls — metalwork, chemical processing, automotive workshops, heavier manufacturing. B2 sites are usually located further from residential areas (Tuas, Jurong, Sungei Kadut).
A B1-zoned building can sometimes host a B2-suitable business with URA approval, but the reverse is straightforward. Always check the URA permissible use before committing.
What should I know about conservation shophouses?
Conservation shophouses are governed by URA conservation guidelines. Key points:
- Façade, original timber elements, airwell, and party walls must be preserved.
- Internal alterations are allowed with URA approval; structural changes need full submissions.
- Many shophouses are mixed-use — commercial ground floor + residential upper floors. The upper floors are residential, which means ABSD applies pro-rata to that GFA for foreign buyers.
- Pure-commercial conservation shophouses (all floors zoned commercial, e.g. parts of Boat Quay) are foreign-friendly with no ABSD.
Do I need URA, SCDF or NEA approval before renovation?
For office and retail fit-outs, you typically need a BCA permit for any structural work, SCDF Fire Safety approval (mandatory for any change of use, sprinkler or smoke-detector layout changes, or compartmentation work), URA Change of Use approval if you are changing the permitted use (e.g. office to F&B), and NEA approval for F&B kitchen layouts, grease traps, and waste handling. Skipping permits is a common, expensive mistake — reinstatement on exit can wipe out the security deposit.
Working With a Licensed Agent
Why use a CEA-licensed agent?
Under the Estate Agents Act, only a CEA-registered salesperson attached to a licensed agency may handle commercial property transactions. A licensed agent is bound by the CEA Code of Ethics, carries professional indemnity through the agency, can access cooperative-marketing networks that surface off-market deals, and provides documented due diligence on tenure, zoning, encumbrances, and outgoings. You can verify any agent’s registration on the CEA Public Register. My CEA Reg. No. is R055935D.
What does an agent typically charge?
Commercial market norms:
- Sale — 1% of the transacted price, payable by the seller. Buyers usually don’t pay an agent fee for sale transactions.
- Lease — 1 month’s rent for every 12 months of lease term, payable by the landlord (sometimes split with tenant for short leases).
- Co-broke — the seller’s or landlord’s commission is shared with the buyer’s or tenant’s agent. Always agree co-broke terms upfront.
GST applies on top of agent fees if the agency is GST-registered.
Common Buyer Mistakes
What are the most common mistakes first-time commercial buyers make?
- Ignoring permissible use. A unit sold as “F&B-ready” may not have URA Change of Use approved — you inherit the application risk.
- Underestimating GST. 9% on a S$3M unit is S$270,000. Make sure you know if it is claimable in your structure.
- Treating tenure casually. A 30-year industrial lease with 6 years left is essentially a fast-depreciating cash flow, not a capital asset.
- Skipping the building’s service charge history. A sudden 30% jump in service charges (common after lift modernisation or chiller replacement) can crush yield.
- Overlooking en-bloc risk on aging buildings. Some 30+ year strata commercial buildings face en-bloc pressure — could be good for windfall, bad for occupier security.
- No reinstatement clause review. On lease exit, ambiguous reinstatement language can cost you 1–2 months’ rent. Negotiate it up front.
Useful Resources
Where can I check official information?
- URA Master Plan — check zoning and permissible use for any address.
- JTC — industrial property approvals, anchor-tenant rules, and B1/B2 sites.
- CEA Public Register — verify any salesperson or agency.
- IRAS — stamp duty calculator and GST treatment.
- BCA — renovation permits and structural approvals.
- SCDF Fire Safety — mandatory for any fit-out or change-of-use.
This guide is intended as general orientation only and does not constitute legal, tax, or financial advice. Stamp duty rates, GST, and lending policies are subject to change. Always consult a qualified professional before transacting. Information current as of May 2026.