According to the latest quarterly research report from Huttons Asia, the shophouse market has remained relatively subdued in the year 2024 with only 84 caveated transactions recorded. This number falls below the average of 200 deals per year between 1995 and 2023. However, Lee Sze Teck, senior director of data analytics at Huttons Asia, comments that there may have been more unrecorded deals as quite a number of buyers did not lodge a caveat last year. This suggests that shophouse transactions in 2024 could possibly be the lowest since 1998.
In terms of transaction volume and quantum, the 84 caveated shophouse deals in 2024 had a total value of $683.6 million, a 38.9% decrease from the previous year’s deal value of $1.1 billion. Lee also mentioned that some of the unrecorded deals in 2024 were substantial, with properties on Amoy Street, Neil Road, North Bridge Road, and Telok Ayer Street estimated to have been sold for over $200 million each.
The largest shophouse deal in 2024 was the divestment of The Rail Mall by Paragon REIT for $78.5 million in June. This strip mall on Upper Bukit Timah Road comprises of 43 shop units and is likely to be the biggest shophouse deal on record, surpassing the previous high of $74.8 million paid for a row of shophouses along Jalan Sultan in March 2022.
The Rail Mall shophouses were valued at $62 million as of December 2023, indicating a gain of around $16.5 million for the seller. Most of the shophouse deals in 2024 were transacted at smaller quantums, with over half of the caveated deals falling within the range of $5 million to $15 million.
Additionally, almost half of the shophouse transactions in 2024 took place in District 8, which Lee attributes to its desirable city-fringe location and comparatively lower prices compared to Districts 1 and 2.
Meanwhile, shophouse rents across the island continued to moderate for the second consecutive quarter, with a 2.6% quarter-on-quarter decline to $6.47 per square foot per month in 4Q2024. However, for the entire year, shophouse rents saw a 1.7% increase.
Overall, despite the relatively muted shophouse market in the year 2024, there were still noteworthy transactions that took place across the island, with District 8 remaining a popular location for shophouse purchases.
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