According to the latest quarterly research report by Huttons Asia, the shophouse market has remained relatively quiet in 2024 with only 84 recorded transactions. This number is lower than the average of 200 yearly transactions between 1995 and 2023.
Although many buyers did not lodge a caveat, making it difficult to accurately estimate the exact number of shophouse deals in 2024, Senior Director of Data Analytics at Huttons Asia, Lee Sze Teck, believes that the figure is likely the lowest since 1998.
The total value of the 84 caveated transactions in 2024 was $683.6 million, a decrease of 38.9% from the previous year’s deal value of $1.1 billion. However, Lee notes that there were a number of significant deals for properties on Amoy Street, Neil Road, North Bridge Road, and Telok Ayer Street that were not caveated, possibly worth more than $200 million.
The largest shophouse deal in 2024 was the divestment of The Rail Mall by Paragon REIT for $78.5 million in June. This is believed to be the biggest shophouse deal in history, surpassing the previous record of $74.8 million for a row of shophouses on Jalan Sultan in March 2022.
The Rail Mall shophouses were valued at $62 million in December 2023, indicating a gain of approximately $16.5 million for the seller. However, most shophouse transactions in 2024 were for smaller quantums, with over half of the caveated deals falling in the range of $5 million to $15 million.
District 8 saw the most shophouse transactions in 2024, making up almost half of the total. Lee attributes this to its attractive location on the city fringe and relatively lower prices compared to Districts 1 and 2.
In the meantime, shophouse rents across the island have continued to decline for the second quarter in a row, with a 2.6% drop from the previous quarter to $6.47 psf per month in 4Q2024. However, for the entire year, shophouse rents saw a 1.7% increase.
Conservation shophouses on Telok Ayer Street are currently on the market for $42 million, indicating that despite the muted market in 2024, shophouses continue to be a sought-after investment.
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