URA reopens Clarke Quay and Beach Road to hotels and hostels

For 12 years, you could not get approval for a new hotel, hostel or serviced apartment in the shophouse blocks of Clarke Quay’s Upper Circular Road area or a stretch of Beach Road. URA has just lifted that ban on a two-year trial, and it changes the maths for commercial shophouses there.

On 5 June 2026, URA issued Circular DC26-07, setting out a revised approach to new development applications for hotel, backpackers’ hostel and serviced apartment uses in two street blocks: one at Upper Circular Road in the Singapore River planning area, and one at Beach Road in the Downtown Core. The relaxation runs as a pilot from 5 June 2026 to 31 May 2028, with each application assessed case by case and still subject to other agencies’ requirements.

URA framed the change as part of its pro-business initiatives to address business needs, encourage more vibrancy and diversity in these precincts, and reduce the compliance burden on businesses.

The change reverses a position URA has held since 2014, when it tightened change-of-use approvals to stop short-stay accommodation from over-proliferating and displacing the broader commercial character of these conservation districts. Since then, new applications that did get through were mostly supporting commercial uses such as shops, restaurants and bars.

The affected Clarke Quay block covers commercial properties along Upper Circular Road, Carpenter Street, Hongkong Street and part of North Canal Road. The Beach Road block takes in commercial and mixed-use buildings along Tan Quee Lan Street, Liang Seah Street, Purvis Street, Seah Street and parts of Middle Road.

The market is already moving

A pair of 99-year leasehold conservation shophouses at 18 and 19 Hongkong Street, right inside the Upper Circular Road block, has been launched for sale via an Expression of Interest exercise closing on August 25, marketed by Knight Frank.

According to the marketing agent, 18 Hongkong Street is a four-storey commercial building with about 5,074 sq ft of floor area and a guide price of $14.5 million ($2,858 psf). It already holds an existing backpackers’ hostel approval, a scarce entitlement in this district until now. 19 Hongkong Street, a four-storey building with a six-storey rear extension and about 8,842 sq ft, went through a $7 million refurbishment in 2015 that added a passenger lift, a private car park lot and a topped-up fresh 99-year lease. Its guide price is $27.5 million ($3,111 psf). Bought together, the pair carries a $42 million tag, about $2,675 psf.

Guide prices for the two conservation shophouses at 18 and 19 Hongkong Street. Source: Knight Frank (marketing agent), July 2026.

As commercial properties, these are exempt from Additional Buyer’s Stamp Duty (ABSD, the extra stamp duty on residential purchases) and Seller’s Stamp Duty, and foreign buyers are eligible, which widens the pool of potential bidders considerably.

What this means for you

• If you own a commercial shophouse in either street block, its potential buyer pool just widened: hotel and serviced apartment operators who were locked out for 12 years can now bid for and repurpose these buildings, subject to approval.
• The relaxation is a pilot ending 31 May 2028, and approvals are case by case. Any purchase priced on guaranteed hotel conversion carries execution risk; the entitlement is only real once URA grants it.
• Commercial shophouses remain one of the few Singapore property plays without ABSD, which is why foreign and institutional money watches this segment. Expect that competition if you are bidding.
• For most home-focused readers this is a commercial-market story, but it is a useful signal: the government is actively loosening rules to inject life into older central districts, which supports values in and around them.