I love conservation shophouses.

So much so that my first office, when I started my fledging company more than 20 years ago, was in a conservation shophouse. This was despite the fact that I could get much cheaper rents in boring industrial or office buildings in less central parts of Singapore.

The shophouse was in the heart of Chinatown with all the hustle and bustle and colours and smells. The rents in early 2000s were still reasonable and we took the 2nd floor and the attic. We painted the shophouse ourselves and changed the toilet bowls. We had fun and friendly neighbours – a modelling agency on the 3rd floor, Sir Masters Tailor on the ground floor, and a kopi-tiam downstairs in the opposite shophouse, ran by a nice young couple, Jimmy and his wife.

There’s something about the hardwood beams on the ceiling, the creaky timber floorboards made of chengal (balanocarpus) or other tropical hardwoods, the narrow dark staircases with beautiful carved wooden banisters, that gives me a feeling of being in touch with history, tradition and nature, not just cold concrete jungle. The louvred wooden windows that opens out to the streets below, where you can observe life passing by, where you can holler to your friends to pick up a kopi or teh-C, where you can obtain wonderful gourmet-tasting hawker food within minutes. Ahh… the joy, the nostalgia.

But after 8 happy years in two different shophouses, (for me at least, as some of my colleagues complained about climbing 3 flights of stairs with heavy equipment), the rent increased too much to be supported by my humble business. We succumbed to industrial space finally…

Thus it is with a certain amount of schmaltz whenever I read about conservation properties in the news. And it’s always about how shophouses are reaching new price points such as ‘Ann Siang Hill shophouse hits new highs of S$3760psf’ sold for S$9.28mil, or ‘Tanjong Pagar shophouse for sale at S$10.2 mil. So when someone asks me if these shophouses are overpriced, I find it hard to answer. Just when we think shophouses are overpriced, a new high is reached somewhere.

So it was with this sentimentality that I finally acquired my first conservation shophouse – quite by luck and certainly with not much of an idea of what goes into owning or maintaining a conservation property, several years back. Three friends wanted to dispose of their shophouse after deciding they couldn’t sustain their cafe business in the late 2000s. I happened to be at the right place at the right time and I love the street that the shophouse sits on and we decided to buy over from them excitedly, taking a huge loan (and some risk). The idea was that we could channel rental to the shophouse and set up our office there.

Big mistake. I was so naive I didn’t even check the approved usage of the shophouse. So of course we were to realise that we could not set up office on the first floor as it’s designated for retail. Also the second floor was simply too small for our needs. Alamak! What to do now? We still have to find another office and the shophouse is turning out to be a white elephant. Really Kepala sakit!

But as with the story of our property investment journey, what was initially a ‘bad’ investment turned out to be a windfall (and a learning moment). Forced to rent out our shophouse, we managed to find a tenant almost immediately who paid a premium on the property as they were being forced out of their shophouse opposite ours. Meanwhile, we set up shop in a industrial location at half the rental of what we were getting from our tenants. The rental yield of the shophouse then was 7-8% – quite unheard of in this day and age.

Along the way, there were various offers to buy the shophouse but we refused. We simply loved our shophouse too much. The carvings on the pillars, the history behind the walls and floors… However about 8 years later an agent approached us to say that a buyer really wanted our shophouse. We said ‘no’, it was not for sale. The rental could now pay the monthly mortgage so there were no urgent reasons for us to sell a place we loved so much. The agent came after us many times and finally we gave what we thought was an impossible price to match. (or what we thought was an impossible price to match. Obviously it wasn’t because prices have already been far exceeded our asking and would be thought cheap in 2021! LOL!) We got a call from the agent to say the buyer wanted to meet us. We were a little surprised at the unusual request but we agreed.

The buyer turned out to be a congenial old Malay gentleman who came to visit us with his handsome son. The old man had a kindly face and a gentle demeanour and his son seemed very filial and held his father’s arm. We liked them straight away. We welcomed them into our office and had a nice chat over coffee and tea. He shared why he wanted the shophouse as it held significant sentimental value for him and his family. He wanted to see us to see what sort of people we were before he shared anecdotes of why he wanted and needed the shophouse. He said he assessed our characters to be honourable and trustworthy and thus shared his history and needs and why he hoped we could part with property.

We must be real softies and the Malay gentleman turned out to be a shrewd businessman on hindsight as he managed to convince us to part with the shophouse! Sigh… I think we were a bit of a sucker back then. Haha!  Still we made more than double the profit on the shophouse and walked away with enough money to invest in our next office.

If the Malay gentlemen had held on to the shophouse till now, he would be able to sell it at double the price he bought from us in 2021! This meant that if I had held on to the shophouse, I could have made almost 4 times the value from when I bought it! Still what’s meant to be is meant to be. I don’t regret so much smaller financial gain as the sentimental loss of not owning a conservation shophouse. We still go back to visit the shophouse some time…

So this is a very long answer to what’s the value of a shophouse. It elicits such emotions from buyers because they are an important part of Singapore’s rich history depending on where you find them, living and breathing artefacts. There are Chinese shophouses, Malay and Arab shophouses and Peranakan ones and some that are quite rojak indeed! I’m glad the Singapore government is conserving most of what’s left of the shophouses in the different districts, because they all bear different characters and harbour different histories.

However, the recent rise in prices of shophouses has less to do with emotions and sentimentality than hard-nosed financials. The overseas rich are buying shophouses by the basket for their family offices not so much because they love them or are emotionally attached, but because the shophouses are commercial properties and thus are not subjected to ABSD (Additional Buyers Stamp Duties). This has driven prices int he last couple of years and continues to drive up prices.

My only hope is that after they move in, they will finally see the beauty and depth of history in the walls, the wooden floorboards and the antique tiles of the conservation shophouse.