F&B Commercial Units for Sale in Singapore: A Smart Investment...

F&B Commercial Units for Sale in Singapore: A Smart Investment Choice

Posted 2025-06-23 06:48:03

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Looking to invest in a thriving sector in Singapore? F&B commercial units offer a unique opportunity for steady income and strong capital appreciation. As the food and beverage industry continues to grow in popularity, demand for F&B spaces in strategic locations has surged. Whether you're a seasoned investor or a business owner, buying an F&B commercial unit in Singapore can be a game-changer.

Why Invest in F&B Commercial Units?

Singapore’s F&B industry is one of the most resilient sectors, with locals and tourists alike fueling constant demand for dining experiences. From hawker stalls to premium dining spots, food is a central part of life in Singapore. This cultural trend creates a consistent need for commercial units suitable for restaurants, cafés, dessert bars, and food kiosks.

Benefits of owning F&B units:

Steady rental income
F&B spaces, especially in high-footfall areas, often command higher rental rates than retail spaces.
Capital appreciation
Well-located commercial units tend to increase in value over time, especially those near MRTs or in popular lifestyle hubs.
Diversification
These properties offer diversification for investors looking beyond residential real estate.

Key Locations for F&B Commercial Units

Location is crucial when choosing an F&B unit. The value and rental yield depend heavily on foot traffic, surrounding developments, and accessibility.

Top areas to consider:

Orchard Road
A prime shopping belt with endless foot traffic from both tourists and locals. Units here are pricey but highly sought-after.
Tanjong Pagar / Chinatown
These areas attract office workers and tourists alike. Perfect for mid-to-high-end dining concepts.
Bugis / Arab Street
A lively area known for cafes and boutique eateries, especially popular among younger crowds.
HDB heartlands (e.g., Ang Mo Kio, Tampines, Woodlands)
Great for investors targeting stable, consistent demand from nearby residents.
New townships and mixed-use developments
Integrated developments often feature F&B zones that serve residents and office tenants.

Freehold vs Leasehold Units

When purchasing an F&B commercial unit, you’ll come across two main tenure types: freehold and leasehold.

Freehold units are more expensive but offer long-term value with no expiry.
Leasehold units (typically 99 years) are more common in newer developments and often priced lower, making them more accessible.

For F&B use, leasehold may be sufficient if the business model focuses on short-to-medium-term operation or franchise rotation.

What to Look for in an F&B Unit

Not all commercial units are suitable for F&B purposes. Before buying, ensure the space meets certain requirements:

F&B zoning approval
The unit must be approved for F&B use by URA (Urban Redevelopment Authority).
Exhaust duct and grease trap
Essential for cooking-based establishments. Retrofitting can be expensive, so check if these are pre-installed.
Water points and drainage
Crucial for food preparation, cleaning, and hygiene compliance.
Size and layout
Small kiosks (100–300 sqft) work well in malls or MRTs, while full-service restaurants may require 1,000+ sqft.
Accessibility and frontage
Visibility and foot traffic matter. The more people see your unit, the better the business potential.

Types of Buyers

Who typically buys F&B commercial units in Singapore?

F&B operators
Business owners who want to control their operating location rather than paying rent.
Investors
Individuals or companies buying units to lease out to F&B tenants for passive income.
Franchisees
Those opening multiple outlets often look for permanent locations to reduce long-term rental overheads.
Family offices / REITs
Larger institutional buyers looking to diversify their real estate holdings.

Current Market Trends in 2025

As of 2025, the Singapore commercial real estate market is seeing renewed interest due to the recovering economy and tourism rebound. With the growth of food delivery and “dine-in experience” trends post-pandemic, F&B units in lifestyle hubs are performing especially well.

Trends to watch:

Smaller, modular spaces
Ghost kitchens and takeaway-only concepts are increasing in demand.
F&B hubs in new mixed-use developments
These attract both residents and office crowds, providing all-day traffic.
Increased interest from overseas investors
Foreign buyers, especially from China and Malaysia, are eyeing F&B assets in Singapore due to strong ROI potential.

Financing and Taxes

If you're planning to buy an F&B commercial unit, remember that the financing structure differs from residential purchases.

Loan-to-Value (LTV) ratios are lower (typically 60–70%), and banks assess based on the commercial nature of the property.
Buyer’s Stamp Duty (BSD) applies to commercial properties but there's no ABSD (Additional Buyer’s Stamp Duty), making it attractive to both locals and foreigners.
GST (Goods and Services Tax) may apply if the seller is a GST-registered entity.

Final Thoughts: Is It Worth It?

Buying an F&B commercial unit in Singapore can be a highly profitable investment if you choose the right location and ensure the unit has proper F&B features. It gives the buyer both security and income, especially in a country where dining is more than just a necessity—it’s a national pastime.

Whether you're an investor looking for strong returns or an entrepreneur seeking a permanent business spot, this market segment offers solid long-term prospects.