Singapore shophouse investment demand to remain resilient

Thanks to its appeal as a defensive asset.

Against the backdrop of an improving economic outlook and easing interest rates, family offices, high-net-worth individuals, and institutional investors may be re-entering the market, seeking opportunistic purchases in the shophouse segment – PropNex said in a report.

“Investment demand for shophouses is expected to remain resilient, supported by the safe-haven appeal of Singapore. The scarcity and heritage value of shophouses also make them ideal for investors seeking more defensive assets that are perceived to better retain value over time,” the report added.

Here’s more from PropNex:

In July 2025, the Singapore government announced revisions to the Seller’s Stamp Duty (SSD) for private residential properties. This change may prompt some investors to shift their focus towards the commercial property market. Notably, commercial properties, including shophouses are not subjected to both the SSD and the additional buyer’s stamp duty (ABSD).

In September 2025, the US Federal Reserve cut interest rates for the first time in 2025, and it was also the fourth cut following 11 rate hikes since March 2022. Due to downside risks to growth and a softening labor market in the US, some analysts anticipate further rate cuts by the US Fed in the last quarter of 2025.

Amid a benign interest rate environment, there may be growing investment interest in shophouses, particularly among investors looking to preserve and grow their wealth through alternative assets.

Looking ahead, PropNex anticipates that several factors could support both shophouse values and rental demand. These include a positive economic growth outlook and the continued resilience of the tourism sector, buoyed by a robust lineup of sporting, entertainment, and MICE (Meetings, Incentives, Conferences, and Exhibitions) events.

Nonetheless, some headwinds remain. Macroeconomic uncertainties, alongside the ongoing trade frictions between the US and China could potentially weigh on business outlook and shophouse yields. That being said, investors often gravitate towards defensive asset classes in uncertain times and the shophouse segment could stand to benefit should there be a capital flight-to-safety.

Meanwhile, shophouse leasing demand is expected to remain stable in the nearterm, although rising operational costs among some tenants (e.g. F&B operators) may potentially limit rental upside.