Shophouse, Office & Industrial — Commercial Property Financing Compared

Commercial property loans typically allow up to 80% LTV — higher than residential property — reflecting the income-generating nature of commercial assets. However, actual LTV varies by lender, property type, and use. Shophouses in prime locations (Chinatown, Tanjong Pagar, Little India heritage areas) attract strong lender appetite and typically get 70–80% LTV. Industrial properties (B1 light industrial, B2 heavy industrial) may see more conservative LTV from some lenders. Own-use properties (you operate from the premises) can attract better terms than pure investment.

Commercial property loans used for genuine business purposes are exempt from the MAS TDSR framework — the 55% TDSR cap that applies to residential mortgages does not apply. However, lenders still conduct their own debt serviceability assessment based on the business's cash flow, revenue, and existing debt obligations. If you are an individual (not a company) buying commercial property for investment, TDSR may still apply depending on how the loan is structured. We clarify this before any application is submitted.

Own-use shophouses — where you operate your business from the premises — often attract better financing terms because lenders see the property as both collateral and the source of business income that services the loan. Investment shophouses — where you rent to tenants — are assessed on rental yield and occupancy. Lenders will apply a rental income haircut (typically 70% of actual or projected rent) when calculating your serviceability. Singapore heritage shophouses in conservation areas tend to hold value well and attract premium lender appetite.

Most major Singapore banks offer commercial property loans, but appetite varies significantly by property type. DBS, OCBC, and UOB have strong commercial property portfolios and are active across shophouses, strata offices, and industrial. Standard Chartered and Maybank are competitive for larger commercial transactions. For industrial properties, some banks are more conservative than others. We know current appetite and will only submit to banks that actively want the type of commercial property you are buying or refinancing.

Singapore shophouses often have mixed use — ground floor commercial, upper floors residential. How the loan is structured depends on the primary use declaration and tenure. For conservation shophouses, financing options are well-established since these are prized assets. If the majority of the floor area or value is commercial, a commercial property loan typically applies. Some lenders may require a commercial property loan for the full building regardless of mixed use. We map the right loan structure based on your specific property's classification.