Archive for category: Misc

The commercial shophouse market in Singapore saw less activity in 3Q2023 with both transactions and rents cooling, compared to the previous quarter. PropNex Realty data revealed 38 shophouse transactions for the quarter, a 19% q-o-q decrease from 47 deals in 2Q2023. With a total value of $350.8 million, this represented a dip of 19% q-o-q.

Despite the fall in the market, the number of deals was 5.6% higher than 3Q2022, with transaction value 2.3% higher. For the first nine months of the year, 117 transactions worth $1.1 billion were recorded. This was lower than the 155 deals worth $1.3 billion logged in the same period of the previous year.

Districts 8 and 14 were the main centres of shophouse activity last quarter, according to PropNex Realty. District 8, including Little India and Jalan Besar areas, saw the highest number of transactions at nine units worth $84.5 million. District 14, covering Geylang and Eunos, followed with six deals.

The most expensive shophouse deal in 3Q2023 was for a three-storey property along Cheong Chin Nam Road in the Beauty World area in District 21. Sold for $41 million or $3,432 psf in September, it was 11,947 sq ft in area. The second-largest deal was for a row of three adjoining freehold shophouses on Jalan Besar, at 6,378 sq ft, sold for $38.5 million ($6,037 psf).

Price growth in the shophouse market was uneven between the districts. Freehold and 999-year leasehold shophouse prices in District 7 and 8 rose 7.3% q-o-q to $5,679 psf, while Districts 14 and 15 experienced a plunge of 39.4% q-o-q to $2,375 psf. Prices in Districts 1 and 2 also declined, by 13.2% q-o-q to $14,333 psf. As for 99-year leasehold shophouses, Districts 7 and 8 saw prices go up 12% q-o-q, to $5,059 psf while Districts 1 and 2 rose 3.9%, to $9,623 psf.

Shophouse rents also took a dip in 3Q2023, with median rents standing at $5.97 psf per month (psf pm) compared to the peak of $6.21 psf pm in 2Q2023. However, leasing volume remained steady with 926 rental contracts valued at $9.2 million signed last quarter. The cumulative number of shophouse rental transactions in the first 9 months of 2023 was 2,756, amounting to a total value of $28.3 million, higher than the 2,685 transactions valued at $25.4 million achieved across the same period in 2022.

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Overall, PropNex believes 2023 will see a more subdued shophouse market performance compared to the stellar sales achieved in the last two years. The limited selection of choice shophouses, along with firm prices from the segment’s growth in recent years, are some of the factors contributing to the lower sales figures. Nonetheless, the report states that investment in shophouses should still remain “fairly resilient” due to the scarcity and defensive nature of such assets, along with stable occupier demand. The ongoing tourism recovery and the growth in the services sector are also expected to support shophouse rental market.