Shophouse sales hit $193.7m in Q2 even as activity stalls

Deal volume hit a 28-year low in H1 amidst buyer-seller price mismatch.

Singapore shophouse sales value surged in the second quarter (Q2), but transaction activity remained weak as a small number of high-value deals lifted total sales.

Shophouse transactions totalled $193.7m in Q2, up 115.2% from $90m in the first quarter and 52.4% from $127.1m a year earlier, according to PropNex Research, based on URA Realis data.

The number of deals, however, fell 11.1% year on year to 16. The 30 transactions recorded in the first half, marked the weakest half-year since H1 1998, when 21 shophouses changed hands.

The gap between transaction value and volume reflects a market where a small number of high-value deals have lifted total sales, whilst investors remain cautious amidst a pricing mismatch between buyers and sellers.

The largest caveated deal in Q2 was a row of adjoining freehold shophouses at Lorong Liput in District 10, which sold for $70m in June.

The 7,542-square-feet (sq ft) property changed hands at about $9,281 per square foot (psf), above the $7,027 psf recorded along the same road in February 2025 and the highest price recorded for Lorong Liput.

A conservation shophouse on Keong Saik Road in District 2 sold for $22m in May, or $17,089 psf. The deal set a record for the district, surpassing the $15,591 psf recorded along the same road in December 2022.

The overall average transacted unit price rose 21.3% quarter on quarter (QoQ) to $5,694 psf in Q2, whilst the average price across Districts 1 and 2 rose 29.7% to $12,024 psf.

PropNex said the price increases were driven by several high-value transactions, including the Keong Saik Road deal.

“With the low transaction count, a handful of deals can move the average materially, and changes in the mix between land-titled and strata-titled shophouses can cause price movements that do not reflect underlying capital values,” it added.

The figures should therefore be treated as indicative rather than a measure of underlying capital values, the report said.

The leasing market also showed weaker activity as the number of rental contracts fell 7% QoQ to 745 in Q2, the lowest since Q2 2020, when 584 contracts were signed.

The total value of rental contracts fell 7.4% QoQ to $7.7m, the lowest quarterly figure since Q1 2021, when rental contracts were worth $7.39m.

The median monthly shophouse rent fell 0.5% QoQ to $6.40 psf, marking a second consecutive quarterly decline.

PropNex said challenges in the retail, services, and food and beverage (F&B) sectors, along with cautious consumer spending and economic uncertainty, had weighed on leasing activity.

It added that occupiers could defer expansion plans and take a measured approach to leasing decisions.

The leasing outlook is expected to remain measured as occupiers assess the business environment, which could give tenants more negotiating leverage.

“Some landlords may need to offer more competitive rental terms, or undertake asset enhancement works, to attract and retain tenants,” the report said.

For the investment market, PropNex expects activity to remain measured for the rest of 2026 as investors stay cautious and selective.

It said uncertainty was likely to weigh more on transaction volumes than values, whilst scarce prime shophouses and stable investor demand could support capital values.

A growing number of shophouses have also been put up for sale in recent months, according to the report. The increase in available stock could help unlock pent-up demand from interested investors.