The shophouse market has proved to be relatively quiet in 2024, recording only 84 transactions with caveats according to Huttons Asia. This number remains lower than the average of 200 deals per year between 1995 and 2023, as stated in their latest quarterly research report on the shophouse market.
Senior Director of Data Analytics at Huttons Asia, Lee Sze Teck, notes that although some buyers may not have lodged caveats, the number of shophouse deals in 2024 is likely the lowest since 1998. The total value of the 84 transactions was $683.6 million, a 38.9% decrease from the $1.1 billion recorded in the previous year.
However, Lee also mentions that the transactions that were not caveated last year include several significant deals for properties on Amoy Street, Neil Road, North Bridge Road and Telok Ayer Street, which he believes were sold for more than $200 million.
In June 2024, the biggest shophouse deal was the divestment of The Rail Mall by Paragon REIT for $78.5 million. This strip mall on Upper Bukit Timah Road consists of 43 shop units, and Lee comments that it is likely the largest 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 an estimated gain of $16.5 million for the seller. However, most of the shophouse deals in 2024 were smaller in quantum, with over half of the caveated deals valued between $5 million to $15 million.
Moreover, nearly half of the shophouse transactions in 2024 took place in District 8, which Lee attributes to its desirable location near the city-fringe and lower prices compared to Districts 1 and 2.
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In the meantime, shophouse rents nationwide have declined for the second quarter in a row, dropping 2.6% quarter-on-quarter to $6.47 psf per month in 4Q2024. However, for the entirety of 2024, shophouse rents remained up by 1.7%.
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Furthermore, conservation shophouses on Telok Ayer Street have been put up for sale at $42 million, attracting potential buyers who are interested in these well-maintained historical properties.