Shophouse sales fall nearly 39% in 2024, lowest since 1998: Huttons

The shophouse market only recorded 84 caveated transactions, below the average of 200 transactions from 1995 to 2023.

The total caveated transaction value for shophouses in 2024 was $683.6m, representing a 38.9% decline from 2023’s $1.1m, Huttons revealed.

In a report, Huttons said the shophouse market was relatively quiet in 2024, recording 84 caveated transactions, well below the yearly average of 200 transactions from 1995 to 2023.

Whilst interest improved from the low point in Q4 2023, the 2024 transaction volume was likely the lowest since 1998.

Additionally, several high-value transactions were not caveated, particularly in Districts 1, 2, and 7, where deals along Amoy Street, Neil Road, North Bridge Road, and Telok Ayer Street exceeded $200m.

More than half of the transactions in 2024 were in the $5m to $15m price range, as investors sought smaller, more accessible deals. Shophouses with F&B approvals remained highly attractive, given their potential for higher rental yields.

Geographically, District 8 accounted for nearly half of all shophouse transactions in 2024, likely due to its city fringe location and lower price quantum compared to Districts 1 and 2.

In terms of tenure, close to 90% of the shophouses sold in 2024 were freehold or had 999-year leases, indicating strong investor preference for long-term assets.

Amongst the top shophouse transactions in 2024, The Rail Mall was the largest, changing hands for $78.5m in June 2024.

This sale set a new record for the highest shophouse deal, surpassing the previous high of $74.8m for a row of Jalan Sultan shophouses in March 2022.

On the rental front, the market softened slightly in Q4 2024, with tenancies declining by 7.2% due to the year-end holiday period and business closures.

Islandwide rents fell for the second consecutive quarter, declining 2.6% to $6.47 psf/month. However, shophouse rents still went up by 1.7% for the full year.