Shophouse Market Activity Stays Subdued 2Q2025
The shophouse market remained quiet in the previous quarter, with 18 transactions recorded in 2Q2025 based on caveats lodged, according to research by PropNex. This reflects a 10% drop from the 20 deals recorded in 1Q2025 and a 14.3% decline compared to 2Q2024.
PropNex explains that the decline is due to a mismatch in price expectations between buyers and sellers, which has been further exacerbated by the trade tariffs announced by the US in April and the escalating conflict in the Middle East. These factors have led to uncertainty in the market.
The total sale value of the 18 shophouses sold in 2Q2025 was $127 million, which is a 6.6% increase from the previous quarter but a 35% decrease compared to the same period last year.
However, PropNex notes that there could potentially be more shophouse sales in 1Q2025, as the caveats for some transactions may not have been lodged yet. These include the reported sale of the 48-key boutique hotel 21 Carpenter on New Bridge Road for $100 million, as well as the 49-key hotel The Duxton Reserve Singapore, which was said to have sold in early April for $80 million.
Out of the 18 caveated shophouse transactions, seven were located in District 8, covering Little India and Jalan Besar. The total value of these deals was $53.1 million, with the highest transaction being the sale of a shophouse in Bukit Pasoh Conservation Area for $12 million in April.
PropNex also highlights that despite the decline in transactions in 2Q2025, there were more big-ticket deals. A total of 14 shophouses were sold for at least $5 million, surpassing the nine sold within that price range in the previous quarter.
In terms of leasing, 800 shophouse rental contracts were signed in 2Q2025, a 4.9% decrease from the previous quarter. The total value of these contracts was $8.9 million, which is lower than the $9.1 million recorded in 1Q2025. The monthly median rental for shophouses was $6.68 per square foot, representing a 3.1% increase from the previous quarter but a 2.2% decrease compared to the same period last year.
Another report by Knight Frank shows that there were a total of 42 shophouse transactions in 1H2025, with a total value of $462.9 million. This indicates a decline in both volume and sales value from 2H2024, when 50 deals worth $520.2 million were recorded. However, prices remained relatively flat, with a 0.5% increase to $6,431 per square foot on land in 1H2025.
The two biggest shophouse transactions by absolute value in the first half of the year were the sale of 21 Carpenter and The Duxton Reserve Singapore, according to Knight Frank. The firm also notes that the living sector in shophouses has become more attractive to investors, especially with challenges faced by the F&B sector in recent times.
In 1H2025, 37 of the 42 shophouse deals were for properties with freehold tenures, with a total value of $358.4 million. On the other hand, there were five leasehold shophouse deals worth $104.6 million. The higher sales value for leasehold shophouses in 1H2025 was due to the increase in average unit price to $7,260 per square foot on land, a 33.5% jump from 2H2024.
Knight Frank also notes that nine shophouses were sold in 1H2025 with a capital appreciation of over 100%. The highest return was recorded from the sale of 63 Arab Street, which was held for 23 years before being sold for $7.7 million in May, recording a 600% return.
Looking ahead, Knight Frank predicts a slowdown in transactional activity due to the escalating economic uncertainty, which may lead to investors adopting a wait-and-see approach. The firm is projecting shophouse sales volume to total between $700 million and $800 million for the whole of 2025, lower than the $947.8 million recorded in 2024.
PropNex has a similar outlook, stating that prolonged uncertainty and volatility could affect investment appetite, especially for high-value purchases. However, the recent extension of the Seller’s Stamp Duty holding period for private residential properties from three to four years could result in increased interest in commercial real estate, which is not subject to the SSD. As a result, there may be an uptick in investment interest in shophouses, particularly among those looking to invest in alternative assets.
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