Huttons Asia reports that the shophouse market has been relatively subdued in 2024, with a total of 84 caveated transactions. This is below the yearly average of 200 shophouse deals recorded between 1995 and 2023.
According to Lee Sze Teck, senior director of data analytics at Huttons Asia, while many buyers did not lodge a caveat, the number of shophouse deals in 2024 is likely the lowest since 1998.
In terms of transaction volume and quantum, the 84 caveated shophouse transactions had a total value of $683.6 million, a decrease of 38.9% compared to the previous year’s deal value of $1.1 billion.
However, Lee notes that there were also several substantial shophouse transactions that were not caveated last year. These include properties on Amoy Street, Neil Road, North Bridge Road, and Telok Ayer Street, which were estimated to be sold for more than $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 likely 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 approximately $16.5 million for the seller. However, most of the shophouse deals in 2024 were done at smaller quantums, with more than half of the caveated deals valued at $5 million to $15 million.
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Additionally, almost half of the shophouse transactions last year took place in District 8. This is attributed to its appealing city-fringe location and lower prices compared to Districts 1 and 2.
In terms of rents, shophouse prices continued to moderate for a second consecutive quarter, falling 2.6% quarter-on-quarter to $6.47 per square foot (psf) per month in 4Q2024. However, for the whole of 2024, shophouse rents increased by 1.7%.