If you are looking to purchase a non-residential property, it probably falls under the category of Commercial. It's a broad category where office spaces, retail spaces, warehouses, supermarkets, industrials etc are included.
Commercial - properties zoned for the following usage: office (grade A, B and C), retail, shophouse and HDB shophouse, medical suites, and mixed development
Industrial - properties zoned for light industry (b1), general industry (b2), workshop, warehouse, storage
What Do Banks Look Out For?
Generally, most people purchase commercial property for own usage. However, this property type has seen an uptick in interest from investors in the wake of residential cooling measures in Singapore. This segment are not subjected to draconian restrictions in terms of purchase and financing. That being said, financing for commercial property is not a walk in the park. Let's explore the considerations we have during the review of your application:
Tenure - Leases of these properties range from 30 years to 60, 99 or even freehold.
Purpose - Is the property used for investment or own usage?
Buyer profile - Is the property purchased by an individual, investment holding company, operating company or trust?
Serviceability - While this word may seemed a mouthful to pronounce, it simply refers to the ability of the buyer/ owner to demonstrate its capability to repay the commercial property loan.
Interest rate - Rates in the commercial segment are higher than residential, generally about 0.5% to 1%.
Fees - Lo and behold, did you know some mortgages attract admin processing fees or annual fees?
To summarize, these considerations can prove to be complex in handling a commercial property loan. Property investment is a big decision and require hefty outlay. The last you want is to neglect the financing component. This is where you need an experienced commercial mortgage consultant, who can advise you and reach out to every possible bank and financial institution.