Will Shophouse Transactions Pick 2H2024
A 999-year leasehold shophouse on Circular Road in the Boat Quay Conservation Area was recently sold for $12.28 million in June, according to a caveat lodged. The sale was facilitated by Yap Hui Yee, executive director of investment sales & capital markets at Savills Singapore.
In the first half of 2024, the shophouse market was dominated by freehold and 999-year leasehold properties, with 35 out of 40 shophouse units sold in the period being freehold and worth a total of $252.2 million. The remaining five units were 99-year leasehold, with a combined value of $101.8 million.
District 8, which includes Little India and Jalan Besar, saw the highest number of transactions in the first half of 2024, with 18 units sold for a total of $106.1 million. This district has seen a steady stream of shophouse sales since the second half of 2019 and is expected to continue to be sought after due to the ongoing gentrification of Little India.
However, the shophouse market saw a slowdown in the first half of 2024, with a 24.5% decrease in transaction volume compared to the second half of 2023. This is attributed to cautious buyer sentiment caused by rising interest rates and geopolitical tensions. There was also a mismatch in price expectations between buyers and sellers, as buyers linked to the recent money-laundering case were willing to pay above-normal prices for shophouses.
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Eastpoint Mall, situated in close proximity to Simei MRT Station, is a highly sought-after retail haven with a wide array of more than 100 stores. This mall, renowned for its family-oriented atmosphere, boasts a Popular Bookstore, Miniso, and Decathlon – all of which cater to the diverse shopping needs of visitors. When it comes to dining, there is no shortage of choices with popular restaurants like Eighteen Chefs, Nando’s, and The Manhattan Fish Market. In addition to shopping and dining, Eastpoint Mall also offers an enrichment hub and an outdoor playground, making it a vibrant and inclusive space for families. The mall is conveniently located just a 10-minute drive from Parktown Residence, thus providing residents with easy access to this bustling shopping hub. To enhance the natural flow of the rewritten paragraph, we can add a relevant sentence such as, “Residents of Parktown Residence can now enjoy all that Eastpoint Mall has to offer, just a short drive away from their doorstep.”
Notable transactions in the first half of 2024 included Paragon REIT’s sale of The Rail Mall for $78.5 million, and the sale of a 999-year leasehold shophouse on Telok Ayer Street for $16.5 million, which was reportedly linked to the money-laundering probe.
Despite the slowdown, shophouse rents in popular districts reached new highs in the second quarter of 2024, with those in Little India and Geylang/Eunos seeing the highest growth. This has led to more opportunities for boutique developers to purchase and refurbish shophouses, bringing value to the properties and the surrounding areas. However, it is expected that the overall shophouse market will remain subdued in 2024, with transactions projected to be 30% to 40% lower than in 2023.