The Tenant’s Perspective: Why Businesses Choose Shophouses Over Malls

A shophouse hotel in Belilios Lane, Little India (Image credit: EdgeProp, 2024)

For many business owners, the decision between a mall unit and a shophouse is no longer just about foot traffic. Increasingly, cafés, fitness studios, boutiques, and creative offices are choosing shophouses, not despite their quirks, but because of them.

From branding to layout flexibility, shophouses offer advantages that conventional retail spaces often struggle to match.

Lower Branding Costs, Stronger Identity

In a mall, branding often starts from zero. Tenants must invest heavily in fit-outs, signage, and visual merchandising just to stand out among dozens of similar-looking units.

A shophouse, on the other hand, comes with built-in character. Architectural details such as five-foot ways, timber windows, or distinctive façades instantly communicate personality. 

For many businesses, especially independent brands, the building itself becomes part of the brand story, reducing the need for expensive, attention-grabbing interiors.

An Authentic Atmosphere Customers Remember

Modern consumers value experience as much as product. Shophouses offer a sense of authenticity that’s difficult to replicate in a climate-controlled mall environment.

Illustration of a shophouse cafe

Whether it’s a café tucked along a heritage street or a fitness studio hidden on an upper floor, these spaces feel discovered rather than advertised. 

This sense of intimacy resonates strongly with younger audiences and repeat customers, helping businesses build loyalty through atmosphere rather than promotions.

Flexible Layouts That Adapt to Business Needs

Unlike mall units, which often come with strict design guidelines and fixed floor plates, shophouses provide flexibility. Businesses can experiment with split levels, mezzanines, private rooms, or hybrid front-and-back-of-house concepts.

Shophouse is known for its flexibility for its tenants

This adaptability is especially attractive to:

• Boutique cafés that host events or tastings

• Fitness studios requiring open, column-free spaces

• Creative offices that value natural light and individuality

For tenants, flexibility translates into operational efficiency, and for landlords, it means a broader pool of potential occupants.

Shophouse's Independence from Mall Rules and Rising Costs

Mall tenancies often come with high base rents, service charges, and marketing fees, alongside rigid operating hours. Shophouse tenants enjoy greater autonomy, setting their own schedules, branding approach, and customer experience.

This independence allows businesses to grow organically without the pressure of constant footfall or seasonal mall traffic, an appealing proposition for brands focused on longevity rather than volume.

What This Means for Investors

Understanding tenant motivations helps investors make better decisions. Shophouses attract tenants who value uniqueness, stability, and identity, qualities that often translate into longer leases and lower turnover.

Rather than chasing mass-market retailers, shophouse owners typically secure:

• Lifestyle and destination tenants

• Brand-led businesses with loyal followings

• Operators less sensitive to short-term retail cycles

This alignment between space and tenant intent is a key driver of shophouse resilience.

Shophouses are fundamentally different ecosystems to malls. By offering character, flexibility, and autonomy, they meet the evolving needs of modern businesses.

For investors, understanding why tenants choose shophouses is just as important as knowing how to secure them. Demand isn’t accidental, but built into the very nature of these spaces.

Looking to understand tenant demand beyond surface-level metrics? The PropNex Shophouse Elites team helps investors match the right shophouse to the right tenant for stability, longevity, and value. Speak with us to explore opportunities.