The shophouse market in 2024 has remained relatively quiet, with only 84 caveated transactions, according to Huttons Asia. The consultancy’s latest quarterly research report on the shophouse market shows that this number is below the annual average of 200 shophouse deals recorded between 1995 and 2023.
Senior director of data analytics at Huttons Asia, Lee Sze Teck, notes that while many buyers did not lodge a caveat, the number of shophouse deals in 2024 is likely the lowest since 1998. The total value of the 84 caveated transactions was $683.6 million, representing a 38.9% decrease from the $1.1 billion recorded in the previous year.
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However, Lee points out that the un-caveated shophouse transactions in 2024 included several “substantial” deals in prime locations such as Amoy Street, Neil Road, North Bridge Road, and Telok Ayer Street, which he estimates were sold for over $200 million. The largest shophouse deal in 2024 was the sale of The Rail Mall by Paragon REIT for $78.5 million in June. This is now the most expensive shophouse deal on record, surpassing the previous record of $74.8 million for a row of shophouses along Jalan Sultan in March 2022.
The Rail Mall shophouses were valued at $62 million as of December 2023, meaning the seller made an estimated gain of $16.5 million on the sale. Most of the shophouse transactions in 2024 were for smaller quantums, with over half of the caveated deals valued at $5 million to $15 million.
Furthermore, almost half of the shophouse transactions in 2024 took place in District 8, which Lee attributes to its desirable city-fringe location and lower prices compared to Districts 1 and 2. Shophouse rents islandwide also experienced a slight decrease in the fourth quarter of 2024, dropping 2.6% quarter-on-quarter to $6.47 per square foot per month. However, for the whole of 2024, shophouse rents saw an increase of 1.7%.
In conclusion, the shophouse market in 2024 has been relatively quiet, with a low number of transactions and a decrease in rents. However, some substantial deals were still made in prime locations, and District 8 remains a popular choice for buyers due to its attractive location and lower prices.