Shophouse Market Ends Quiet Year 2024 84 Caveated Transactions Huttons
The shophouse market has remained relatively quiet in 2024, recording a total of 84 caveated transactions, according to the latest quarterly research report from Huttons Asia. This figure is below the annual average of 200 shophouse deals seen between 1995 and 2023.
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Despite the number of buyers who did not lodge a caveat, the number of shophouse deals in 2024 is likely the lowest since 1998, notes Lee Sze Teck, senior director of data analytics at Huttons Asia.
In terms of transaction volume and quantum, the 84 caveated shophouse deals in 2024 amounted to a total value of $683.6 million, a 38.9% decline from the $1.1 billion registered in the previous year.
However, Lee says that there were a few “substantial” shophouse transactions that were not caveated last year, including properties on Amoy Street, Neil Road, North Bridge Road and Telok Ayer Street that were estimated to have been sold for more than $200 million.
The biggest shophouse deal in 2024 was Paragon REIT’s sale of The Rail Mall, a strip mall on Upper Bukit Timah Road with 43 shop units, for $78.5 million in June. According to Lee, this is likely the largest shophouse deal on record, surpassing the previous high of $74.8 million paid for a row of shophouses along Jalan Sultan in March 2022.
Lee also notes that The Rail Mall shophouses were valued at $62 million as of December 2023, indicating an estimated gain of about $16.5 million for the seller on the sale.
While most of the shophouse transactions in 2024 were carried out at smaller quantums, more than half of the caveated deals were valued between $5 million and $15 million.
Furthermore, close to half of the shophouse deals last year occurred in District 8, which Lee attributes to its prime city-fringe location and lower prices compared to Districts 1 and 2.
Meanwhile, rents for shophouses across the island declined for a second consecutive quarter in 4Q2024, falling 2.6% quarter-on-quarter to $6.47 psf per month. However, for the whole of 2024, shophouse rents were up 1.7%.
Rents for conservation shophouses on Telok Ayer Street are in demand, with a shophouse unit priced at $42 million up for sale.