Singapore shophouse sales up 32.7% to S$504.5m in H2 2024

A total of 47 transactions were recorded during the period.

In a recent report, Knight Frank revealed that sales activity in Singapore’s shophouse market picked up slightly in the second half of 2024, with 47 transactions translating to a total sales volume of S$504.5 million. This reflected a half yearly sales value increase of 32.7% from S$380.1 million H1 2024 when 44 sales were recorded. 

“The average unit price increased 186.2% to S$6,595 psf on land in H2 2024 from S$2,305 psf on land in H1 2024. The stark increase was due to the institutional sale of the leasehold The Rail Mall comprising a land area of 105,563 sf (inclusive of carpark lots) for S$78.5 million (S$744 psf on land) by Paragon REIT in June 2024 that set a low base for the average unit price in H1 2024,” the report said.

Here’s more from Knight Frank:

Despite the series of interest rate cuts announced from September 2024 onwards, the sentiments of shophouse buyers and investors remained careful and cautious, growing increasingly resistant to further increases in asking prices from vendors, who in turn are fully cognisant of a shophouse’s investment potential over time. 

Additionally, there remained shophouse transactions that were not reported without caveats being lodged in H2 2024, due to buyers who preferred to stay out of the spotlight. As a result of the relatively quiet buyer interest in 2024, the total transaction value of S$884.6 million for the entire year was not only 20.9% lower than the S$1.1 billion in 2023, but also the lowest annual total since 2016 (S$713.7 million).

Freehold shophouses remained a popular choice among investors and buyers in H2 2024, with 41 of the shophouse units transacted being freehold, three more than the 38 recorded in H1 2024. The total sales value of the freehold shophouses transacted increased to S$465.1 million in H2 2024, a half yearly growth of 67.9% compared to S$277.0 in H1 2024. In tandem, the average unit price of freehold shophouse units grew 21.5% on a half yearly basis to S$6,708 psf on land from S$5,522 psf on land in H1 2024.

Leasehold shophouses did not fare as well as their freehold counterparts in H2 2024, recording a decline of 61.7% in total sales value to S$39.4 million after half a year, despite the same number of shophouse units (six units) sold in the first half of 2024. The average unit price for leasehold shophouses rebounded back to normal levels, jumping 492.1% to S$5,440 psf on land from the low base of S$919 psf on land in H1 2024 having been affected by the sale of The Rail Mall.

Of the 47 shophouse deals in H2 2024, 17 transacted for S$10.0 million or more, where more than half changed hands for more than S$15.0 million. A few notable deals included three shophouses along North Bridge Road that was sold for S$72.0 million in October (S$14,836 psf on land, and S$4,800 psf based on a reported built-in area of 15,000 sf), and another shophouse also located along North Bridge Road that changed hands for S$42.0 million (S$19,717 psf on land, and S$5,833 psf based on a reported built-in area of 7,200 sf) in September 2024. 

Shophouses in District 8 remained the most popular with 16 units sold for a total sales value of S$132.6 million. The ongoing transformation of Little India into an area featuring hipster and trending retail and F&B offerings continues to hold the promise of gentrified growth for the area.

In H2 2024, a total of eight shophouses transacted enjoyed returns of over 100%, with a combined average holding period of 18 years. The top three realised returns of more than 800%. The most noteworthy of these shophouse units sold was the sale of Atland House at 200 Bukit Timah Road for S$17.0 million in August 2024 after being held for 24 years with an extraordinary return of 12,640.3%.

Conservation shophouses continue to offer both local and foreign buyers and investors with a safe and relatively secure asset for family wealth preservation in a world that is growing less certain with political tensions and economic protectionism. 

Although shophouse activity was subdued in 2024 when contrasted with the more than S$1 billion in sales value annually between 2021 and 2023, the inherent rarity and heritage provides a long-term assurance for capital preservation so long as Singapore remains stable and on a steady path of growing affluence.