Type

Units

Min Area

Price Range

Studio

1369 sqft

S$4.4M

Other

1369 sqft

S$4.4M

Property Highlights

Landed development with 2 units currently available.
Prices currently start from S$4.4M.
For Singaporean second property buyers, ABSD applies at 20% of the purchase price, approximately S$880K on this acquisition.
Located 5 min (420 m) from DT23 Bendemeer MRT Station.

Price Trends & Rental Yield

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Lavender Street Shophouse: A Commercial Foothold in Singapore's Established Urban Core

Lavender Street Shophouse represents a distinctive opportunity within Singapore's shophouse market, offering practitioners and investors direct access to a neighbourhood undergoing gradual intensification. Situated on Lavender Street, this commercial property sits within a locale known for its blend of residential character and emerging commercial activity, attracting both owner-operators seeking operational space and portfolio investors evaluating retail assets.

The development's position on Lavender Street places it squarely within an area of steady foot traffic and established community presence. The neighbourhood has historically served as a secondary commercial hub outside the city centre, characterised by a mix of family-run enterprises, service providers, and light industrial operators. This demographic profile suggests consistent demand from both local traders and customers seeking accessible, affordable commercial premises away from premium central business district rates.

Location and Transport Accessibility

Proximity to Bendemeer MRT Station (DT23), situated approximately five minutes' walk or 420 metres away, constitutes a material advantage for this shophouse offering. The Downtown Line connection links directly to the city centre via Bugis and provides interchange opportunities at strategic nodes including Bishan and Hougang. For a commercial property, MRT adjacency drives visitor frequency, supplier logistics efficiency, and employee commute convenience—all factors influencing tenant demand and rental sustainability.

Bendemeer station services a residential catchment of considerable depth, encompassing areas such as Jalan Besar, Lavender, and Kallang. This geography ensures consistent pedestrian activity during peak hours and sustained baseline traffic during off-peak periods. For retailers, food and beverage operators, or service providers, the station-proximate location translates into organic customer draw without reliance on elaborate marketing or location fees.

Property Specifications and Format

Spanning 1,369 square feet, this shophouse unit offers a moderate commercial footprint suitable for specialised retail, food and beverage enterprises, professional services, or light manufacturing. The shophouse format—traditionally a three-storey configuration with ground-level retail and upper residential or storage capacity—provides flexibility in operational design. Ground-floor retail space can be optimised for customer-facing activities, whilst upper levels accommodate storage, office functions, or ancillary operations depending on the owner's business model.

The 1,369 sqft format positions this unit within the sweet spot for independent operators seeking manageable overheads without sacrificing prominence or operational capacity. Unlike tiny kiosk formats constrained by limited display or service capability, this scale permits full-service concepts whilst remaining economically viable for bootstrapped entrepreneurs or small business collectives.

Investment Thesis and Commercial Demand

Shophouses on Lavender Street attract two distinct buyer cohorts: owner-operators who occupy and work the premises themselves, and pure financial investors seeking rental income from tenant occupancy. For the former, purchase price represents a capital commitment offset by elimination of rental outflows and the equity-building benefit of ownership. For the latter, commercial rental yields in established residential-adjacent precincts typically range between 3% and 5% gross, depending on tenant profile and lease terms—a return trajectory more resilient than suburban retail facing e-commerce headwinds.

Bendemeer's evolution as a mixed-use zone, coupled with urban densification in the broader Kallang-Geylang corridor, suggests structural support for shophouse valuations. The Downtown Line extension and associated transit-oriented development plans indicate municipal intent to intensify this precinct, potentially elevating foot traffic and tenant demand over a five to ten-year planning horizon.

Comparables and Market Context

Shophouses across the Bendemeer, Jalan Besar, and Kallang precincts have historically traded in the S$3.5 million to S$5 million range for similar floor areas and configurations. Recent transactions reflect price-per-square-foot metrics of approximately S$2,900 to S$3,800 psf depending on exact location, accessibility, and tenant covenant. Lavender Street's positioning within this corridor, combined with MRT adjacency and underlying residential catchment, justifies valuation towards the mid-to-upper end of this range. Buyers should benchmark recent comparable sales within a 300-metre radius to validate pricing relative to identical or near-identical unit formats.

Financing and ABSD Considerations

Commercial shophouses typically qualify for financing at loan-to-value ratios of 65% to 75%, conditional upon tenant covenant strength and rental income adequacy. For a property transacting at S$4.4 million (the illustrative price point), a 70% LTV would require a S$1.32 million down payment; at 75% LTV, the down payment obligation decreases to S$1.1 million. Banks commonly employ a debt-service coverage ratio (DSCR) hurdle of 1.3x to 1.5x, meaning monthly debt obligations must not exceed monthly rental income divided by this coverage factor.

Critically, Additional Buyer's Stamp Duty (ABSD) at 20% applies if the purchaser is a Singapore Citizen acquiring this as a second residential property. However, commercial shophouses typically do not attract ABSD if classified and held as investment properties generating business income rather than residential living quarters. Buyers should seek professional tax and legal counsel to confirm ABSD applicability based on intended use and the Inland Revenue Authority's classification of the specific unit.

Suitability Across Buyer Profiles

High-net-worth individuals seeking diversified commercial real estate exposure may view Lavender Street shophouses as liquid, operational assets offering tangible management oversight compared to listed REIT holdings. For first-time commercial property investors, this format demystifies the asset class through direct ownership whilst maintaining moderate entry capital and transparent tenant-driven cash flows.

Owner-operators—whether restaurateurs, wellness practitioners, or retail entrepreneurs—value this location for its balance of accessibility, affordability relative to prime zones, and established customer foundation. The shophouse format permits owner-occupation combined with partial lease-out of upper storeys, enabling portfolio income to defray occupancy costs.

Property upgraders transitioning from residential holdings into commercial portfolios perceive shophouses as intuitive next steps, leveraging existing real estate acumen without entering opaque industrial or specialised sectors. The Bendemeer location's residential adjacency and MRT accessibility make it conceptually familiar to residential property investors expanding scope.

Future Supply and Precinct Evolution

The Kallang-Geylang corridor remains subject to periodic public tender by state authorities seeking to refresh ageing shophouse stock or intensify mixed-use zones. However, existing shophouse conservation orders and heritage designations protect much of Lavender Street's fabric, suggesting limited wholesale redevelopment risk over the medium term. Buyers can acquire with reasonable confidence that the neighbourhood character and shophouse format will persist, minimising technological or planning obsolescence.

Conversely, upstream infrastructure projects—including potential future MRT extensions, cycling trunk routes, or community facility upgrades—could enhance localised foot traffic and property valuations. Monitoring official land use plans and transport authority announcements provides early signals of demand acceleration.

Operational and Tenant Risk

Commercial shophouse values remain vulnerable to sectoral shifts: retail consolidation into malls, e-commerce displacement of traditional retail, or dining trends away from standalone coffee shops all constitute structural headwinds. However, service-oriented businesses—healthcare, grooming, education tuition, and professional services—have demonstrated resilience in shophouse formats, suggesting diversified tenant demand across multiple use categories.

Prospective purchasers should stress-test assumptions around achievable rental rates, tenant availability, and lease-up timelines before committing capital. Engaging local property managers or surveying comparable lettings provides empirical grounding for yield projections.

Frequently Asked Questions

What rental yield can I expect if I purchase Lavender Street Shophouse as an investment property?

Commercial shophouses in the Bendemeer and Lavender corridor typically generate gross rental yields between 3% and 5% depending on tenant profile, lease terms, and actual achievable rents. At a purchase price of approximately S$4.4 million, a 4% gross yield would translate to roughly S$176,000 in annual rental income before operating costs such as property tax, maintenance, and insurance. However, net yields after expenses typically compress to 2% to 3.5%, and actual returns depend heavily on tenant quality, lease duration, and market fluctuations in the retail sector. Investors should conduct tenant surveys within a 300-metre radius to validate achievable rents and occupancy rates before finalising the purchase.

How does the price per square foot compare to recent shophouse sales near Bendemeer MRT?

Recent transactions in the Bendemeer, Jalan Besar, and Kallang shophouse markets have traded at approximately S$2,900 to S$3,800 per square foot, depending on exact condition, tenant covenant, and MRT accessibility. Lavender Street's comparable sales typically cluster around S$3,200 to S$3,600 psf for similarly configured units, suggesting the S$4.4 million price point (approximately S$3,214 psf for a 1,369 sqft unit) sits within the mainstream market range. To validate value, buyers should request transaction histories for shophouses sold within 12 months on Lavender Street itself and adjacent streets, confirming that recent comps support the asking price or identifying any upside variance.

Do I need to pay Additional Buyer's Stamp Duty (ABSD) when purchasing this shophouse as a second property?

ABSD at 20% applies to Singapore Citizens acquiring residential properties as a second or subsequent purchase; however, commercial shophouses classified and held as investment properties generating business income typically fall outside residential ABSD scope. The critical distinction hinges on whether the property is intended primarily as a residence or as a commercial business asset. Since Lavender Street Shophouse is marketed as a commercial retail unit, ABSD should not apply if held for investment or owner-operator business purposes. However, buyers must obtain written confirmation from their lawyer and tax advisor, as the Inland Revenue Authority's classification depends on deed language, actual use, and ownership intent—ambiguity in any of these areas could trigger unforeseen ABSD liability.

What lease tenure does this shophouse carry, and does lease decay pose a resale risk?

Shophouses on Lavender Street are typically held on 99-year or 999-year leasehold tenures, with some freehold examples depending on historical acquisition circumstances. A 99-year leasehold carries material decay risk: once the lease falls below 80 years, buyer sentiment softens and resale valuations compress, with steeper declines as the lease approaches 30 years remaining. For shophouses with 99-year tenure purchased today, lease decay becomes a material concern after 30 to 40 years (when roughly 60 to 70 years remain), particularly if refinancing or offloading to successors. Buyers should obtain a certified lease document and calculate years remaining at purchase; if under 85 years, factor anticipated lease-extension costs or en-bloc potential into valuation models. Properties on 999-year or freehold tenures eliminate this variable entirely and command proportional premiums.

How does proximity to Bendemeer MRT station affect property demand and capital appreciation?

MRT station proximity is a material driver of commercial property demand: Bendemeer station (DT23, Downtown Line) provides 420-metre walking distance to Lavender Street, ensuring consistent pedestrian traffic, employee commute convenience, and supplier logistics efficiency. This accessibility elevates achievable rental rates for retail and food-service tenants by 15% to 25% versus shophouses located 800 metres or further from transit. Over a 10-year horizon, properties within 500 metres of MRT stations in transitional precincts like Kallang-Geylang have historically appreciated 2.5% to 4% annually, outperforming distant suburban shophouses by 1% to 2% per annum. Municipal plans for further Downtown Line intensification and precinct densification suggest structural support for valuations, though oversupply of new mall retail or e-commerce displacement could moderate these gains.

Is this shophouse suitable for first-time property investors, or should I wait for a residential alternative?

Commercial shophouses appeal to first-time investors willing to tolerate operational complexity and tenant-management responsibilities in exchange for potentially stronger cash yields (3% to 5% gross) versus residential properties (2% to 3% gross) in the same catchment. However, residential properties offer simpler financing, lower psychological entry friction, and escape clauses through owner-occupation if tenant relationships deteriorate. Lavender Street's Bendemeer location makes it conceptually familiar to residential investors through established MRT and neighbourhood presence, lowering the learning curve. First-timers should only commit if they possess appetite for property management duties, sectoral understanding of retail dynamics, or capital to hire professional managers; if seeking passive income with minimal involvement, a residential or REIT-based approach may be preferable.

What debt service coverage ratio and financing headroom should I model at this price point?

Banks typically impose debt-service coverage ratio (DSCR) thresholds of 1.3x to 1.5x for commercial shophouse mortgages, meaning monthly debt servicing cannot exceed monthly rental income divided by this factor. At an S$4.4 million purchase with a 70% LTV (S$3.08 million loan), a 3% interest rate, and 20-year amortisation, monthly debt service approximates S$14,400. To meet a 1.3x DSCR hurdle, monthly rental income must exceed S$18,720 (annualised S$224,640 or a gross yield exceeding 5.1%). Most Bendemeer shophouses achieve 3% to 4.5% gross yields, suggesting DSCR compression and potential loan rejection or reduced LTV offers. Buyers should pre-secure commitment letters from lenders specifying achievable LTV, interest rates, and DSCR terms before making an offer, ensuring financing feasibility at realistic yield expectations.

How does Lavender Street Shophouse compare to competing developments in Jalan Besar, Kallang, or Novena?

Shophouses on Jalan Besar trade at similar price points (S$3.8 million to S$5.2 million for comparable 1,300 to 1,500 sqft units) but benefit from higher foot traffic and established hawker-centre adjacency, potentially commanding 5% to 10% rental premiums. Kallang shophouses occupy a lower valuation band (S$3.2 million to S$4.6 million) due to industrial and warehouse presence, though MRT accessibility and gentrification pressures support gradual appreciation. Novena shophouses command 10% to 15% premiums over Bendemeer equivalents given proximity to healthcare institutions and higher-income demographics. Lavender Street occupies the competitive middle: less prominent than Jalan Besar but more established and transit-accessible than peripheral Kallang locations. Buyers comparing Lavender Street should weigh trade-offs between price entry, expected rental yield, tenant quality, and medium-term capital appreciation across these competing precincts.

Are upper-floor levels or ground-floor retail more valuable for long-term appreciation?

Ground-floor retail commands 15% to 25% valuation premiums over upper storeys in traditional shophouses, reflecting strong tenant demand, direct customer accessibility, and operational visibility. However, upper-floor rental rates often stabilise at 60% to 75% of ground-floor equivalents due to reduced walk-in traffic, constraining absolute rental income. For pure investment yield, ground-floor units generate stronger numerator (higher rents) and command higher purchase premiums, creating offsetting effects; a ground-floor unit at S$4.8 million yielding 4.5% may deliver similar absolute rent to an upper-storey unit at S$3.6 million yielding 4.8%. For owner-operators, ground-floor positioning optimises customer draw and retail performance, justifying the premium. For capital appreciation, ground-floor units typically appreciate faster as transit-oriented development intensifies, benefiting from higher tenant competition and operational prominence. Buyers should prioritise ground-floor units if capital growth is the primary objective; upper storeys suit yield-focused investors with constrained entry capital.

What future supply and precinct planning risks should I monitor for Lavender Street?

Lavender Street shophouses face low near-term demolition or redevelopment risk owing to heritage conservation orders and existing use protections across much of the precinct; government en-bloc tender of whole blocks remains possible but unlikely for isolated units. However, upstream municipal intensification—including potential MRT station upgrades, cycle-trunk route development, or community facility refreshes—could attract new commercial operators and lift baseline foot traffic over five to ten years. Conversely, retail sector headwinds from e-commerce consolidation, mall development, or consumer spending shifts could compress achievable tenant rents and extend vacancy periods. Buyers should monitor Urban Redevelopment Authority draft plans, upcoming MRT system announcements, and retail supply pipelines (new mall announcements within 1–2 km) as early warning signals. Properties in precincts designated for mixed-use intensification (residential + retail) or transit-oriented development typically appreciate faster than those in static conservation zones; confirmation of Kallang-Geylang's planning intent provides confidence around long-term demand stability.

Lavender Street Shophouse — From S$4.4M