Huttons Asia reports a subdued shophouse market in 2024, with only 84 caveated transactions. This number falls below the yearly average of 200 deals recorded between 1995 and 2023.
Lee Sze Teck, senior director of data analytics at Huttons Asia, notes that while many buyers did not lodge a caveat, the number of shophouse deals in 2024 is likely the lowest since 1998.
The 84 transactions in 2024 have a total value of $683.6 million, a 38.9% decrease from the $1.1 billion registered in 2023.
However, Lee points out that there were a significant number of un-caveated transactions last year, including some “substantial” deals in prime locations, estimated to be sold for over $200 million.
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The largest shophouse deal in 2024 was Paragon REIT’s sale of The Rail Mall for $78.5 million in June. This is a record-breaking transaction, surpassing the previous high of $74.8 million paid for shophouses along Jalan Sultan in March 2022.
The Rail Mall shophouses were valued at $62 million as of December 2023, resulting in an estimated gain of $16.5 million for the seller.
Most of the shophouse deals in 2024 were smaller in quantum, with over half valued at $5 million to $15 million.
In terms of location, almost half of the transactions occurred in District 8, known for its attractive city-fringe location and relatively lower prices compared to Districts 1 and 2.
However, shophouse rents moderated for a second consecutive quarter, dropping 2.6% q-o-q to $6.47 psf per month in 4Q2024. Despite this, rents for the whole of 2024 were up 1.7%.
The shophouse market remained relatively stable in 2024, with a few noteworthy transactions and a moderate increase in rents. However, the number of caveated transactions was significantly lower than previous years, indicating a subdued market.