Shophouse Market Ends Quiet Year 2024 84 Caveated Transactions Huttons
Huttons Asia reported that the shophouse market has remained relatively quiet in 2024 with only 84 caveated transactions recorded. This number is lower than the average of 200 transactions per year between 1995 and 2023.
Lee Sze Teck, senior director of data analytics at Huttons Asia, noted that a significant number of buyers did not lodge caveats for their purchases, making the actual number of shophouse deals in 2024 possibly the lowest since 1998.
The total value of the 84 caveated transactions was $683.6 million, a 38.9% decrease from the previous year’s deal value of $1.1 billion. However, Lee pointed out that there were a number of large shophouse deals that were not caveated, such as properties on Amoy Street, Neil Road, North Bridge Road, and Telok Ayer Street, which were estimated to be sold for more than $200 million.
The biggest shophouse deal in 2024 was the sale of The Rail Mall by Paragon REIT for $78.5 million in June. This is expected to be the largest shophouse deal on record, surpassing the previous record of $74.8 million paid for a row of shophouses along Jalan Sultan in March 2022.
The shophouses at The Rail Mall were valued at $62 million as of December 2023, indicating a gain of approximately $16.5 million for the seller. However, most of the shophouse transactions in 2024 were for smaller quantums, with more than half of them valued at $5 million to $15 million.
In terms of location, almost half of the shophouse deals in 2024 were concentrated in District 8, which Lee attributed to its desirable city-fringe location and relatively lower prices compared to Districts 1 and 2.
The islandwide rental market for shophouses saw a decrease of 2.6% quarter-on-quarter in 4Q2024, with an average rental of $6.47 per square foot per month. However, shophouse rents were still up by 1.7% for the entire year of 2024.
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In other news, a set of conservation shophouses on Telok Ayer Street has been put up for sale at an asking price of $42 million.