Why GFA Matters: A Smart Investor’s Guide to Commercial Properties in Singapore

When investing in commercial real estate in Singapore, one of the most crucial—yet often misunderstood—concepts is Gross Floor Area (GFA). Whether you’re eyeing a shophouse, a mixed-use development, or a commercial building in the CBD, understanding GFA can dramatically improve your ability to assess property value and returns.

🧱 What is GFA?

Gross Floor Area (GFA) is the total area within a building, including all usable and enclosed spaces—like rooms, corridors, and walls. However, it excludes specific non-usable spaces such as:

• Elevator shafts
  
• Staircases
  
• Roof terraces
  
• Planter boxes
  
• Car parks
  

In simpler terms, GFA represents the functional building space regulated by Singapore’s Urban Redevelopment Authority (URA). It is calculated as:

GFA = Land Size × Plot Ratio

This formula gives investors a direct insight into how much space they’re effectively working with.

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📊 GFA vs Gross Lettable Area (GLA) vs Built-Up Area

A common pitfall for new investors is confusing GFA with Gross Lettable Area (GLA) or built-up area. These terms are not interchangeable:

• GLA refers to the space that can be leased to tenants (i.e., income-generating space).
  
• Built-up area includes balconies, air-con ledges, and other extensions that may not be part of GFA.
  
• GFA, on the other hand, is what URA uses to regulate development intensity—and is key in comparing property values across different buildings.
  

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💡 Why GFA/psf is the Gold Standard for Valuation

When comparing properties, the most accurate method is to use price per square foot of GFA (GFA/psf). Here’s why:

• Standardized metric – Since GFA is regulated, it gives a consistent baseline across properties.
  
• Transparency in valuation – You can better assess whether a building is overpriced or underpriced based on how much usable space you’re getting.
  
• Better benchmarking – It allows you to make apples-to-apples comparisons between two different commercial assets, even in different zones.
  

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📈 How Abiel Helps Investors Maximize Returns

At Abiel, we don’t just look at superficial figures. We dive deep into regulatory details, including URA’s latest harmonization efforts that favor buyers by simplifying and aligning GFA computations.

Our team leverages this knowledge to:

• Identify undervalued commercial assets
  
• Project development potential and yield accurately
  
• Negotiate smarter on behalf of our clients
  

By understanding GFA and using it strategically, we help you maximize your returns and make well-informed decisions in Singapore’s competitive property market.

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📩 Let’s Talk

Got your eye on a shophouse or commercial asset? Need help decoding the GFA or planning your next investment?

📧 Contact us at enquiries@abiel.com.sg
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