Shophouse Rental Yields in Singapore: Gross vs Net

Short answer

Rental yield is annual rent divided by purchase price. Gross yield ignores costs; net yield deducts vacancy, property tax, maintenance, insurance and management. Shophouse yields in Singapore are typically moderate because buyers pay for scarcity and capital growth, so always calculate net yield from actual lease terms.

Gross yield: Rent ÷ price
Net yield: After costs and vacancy
Highest rent: Typically ground-floor F&B
Source: Leases, listings, URA rental data

Reviewed November 2026.

Bar chart showing relative rent potential per sq ft by shophouse floor and use, ground floor F&B highest — Relative rent potential by floor & use

Gross vs net yield formulas

Measure	Formula	Notes
Gross yield	Annual contracted rent ÷ purchase price	Excludes all costs and vacancy
Net yield	(Annual rent − operating costs) ÷ (price + acquisition costs)	Include stamp duty and legal fees in the denominator
Yield on cost	Net operating income ÷ total cost incl. restoration	Best for value-add deals

Five step diagram showing how to calculate net rental yield on a Singapore shophouse — From rent to net yield

Costs to deduct

Property tax (check IRAS for the current rate for your use class)
Insurance, including public liability
Façade and structural maintenance, which can be higher on conservation buildings
Vacancy and leasing downtime between tenants
Agent and management fees
Financing costs if leveraged (not part of property yield, but part of equity return)

What shapes income

Rent depends on location and footfall, floor level, permitted use (F&B, retail, office), lease length, rent-review terms and tenant covenant. Ground-floor F&B generally earns more per sq ft than upper-floor office. See our indicative yield bands on the historical yields insight page, and verify any figure against current rental listings.

Sources and further reading

IRAS – Inland Revenue Authority of Singapore — Stamp duties, property tax, GST on property
URA – Urban Redevelopment Authority — REALIS, property market statistics, conservation guidelines
EdgeProp Singapore — Transaction reports and commercial market commentary

Figures and rules change; confirm current details with the source before transacting. See also all investment and market pages.

Commission a conservation-aware valuation

We price URA conservation grade, tenure residual, F&B licensing readiness, and streetscape scarcity — not brochure comps alone.

Access curated off-market conservation assets

Join our Private Deal Room for introductions to freehold and 999-year leasehold shophouses reserved for serious principals.

Frequently Asked Questions

What is a good rental yield for a Singapore shophouse?+

It depends on tenure, location and your return target. Many investors accept lower running yield in exchange for scarcity and capital appreciation. Compare net yield against your financing cost and alternatives.

How do I calculate net rental yield?+

Subtract operating costs and vacancy allowance from annual rent, then divide by purchase price plus acquisition costs such as stamp duty and legal fees.

Do upper floors earn the same rent as the ground floor?+

Typically not. Ground-floor F&B and retail space usually commands higher rent per sq ft than upper-floor office or residential space, though this varies by building.

Where can I find current shophouse rent levels?+

Check rental listings, URA rental data for commercial categories, and brokerage reports. Our rental listings page shows currently advertised space.

What is the ROI on a shophouse investment in Singapore?+

Return on investment combines net rental income and capital gain, less acquisition and financing costs. It varies by building and period, so calculate it from actual lease terms, entry price and recent comparable sales rather than a headline figure.