Districts 14 (Geylang, Eunos) showed a 10.5% q-o-q growth in median rents (Picture: Samuel Isaac Chua/EdgeProp Singapore)
1Q2024 saw 21 shophouses change hands, a 31% q-o-q increase from 16 deals the previous quarter. In terms of sales value, the deals translated to $180 million, a 62% q-o-q jump from 4Q2023, according to PropNex Research in a report on April 24.
As the caveats for some transactions may not have been lodged, for instance, a handful of shophouse transactions in Districts 1 and 2 in the CBD, the actual sales figure in 1Q2024 is likely to be higher, notes Propnex.
Transaction volume in 1Q2024 was 34% down from the same period last year when 32 deals were concluded. By transaction value, the $180 million worth of deals in 1Q2024 was 39% lower y-o-y compared with $297 million in 1Q2023. The pullback in sales could be attributed to the tentative market sentiment, seasonal lull, and stringent due diligence checks, according to the PropNex report.
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Of the 21 shophouse transactions recorded, PropNex notes that 16 deals (76%) were transacted for above $5 million. The top transaction for the quarter – by absolute price - occurred in March when a three-storey shophouse changed hands for $19 million. The property sits on a freehold site of 1,300 sq ft along Pagoda Street in the Chinatown Conservation Area in District 1.
Monthly median shophouse rent has also increased for the second straight quarter, notes PropNex, reaching a high of $6.48 psf. Districts in the city fringe led the growth, with Districts 14 (Geylang, Eunos) showing a 10.5% q-o-q growth and District 15 (Katong, Joo Chiat) showing a 5.4% growth in median rents.
On the other hand, shophouses in the city centre saw median rents slip. Districts 1 (Raffles Place, Telok Ayer, Chinatown) and 2 (Tanjong Pagar, Duxton ) saw median rents dip 5% q-o-q and 0.9% q-o-q, respectively.
According to PropNex, several market factors have slowed sales activity in 1Q2024, including limited availability, pricing mismatch, and the effects of last year's anti-money laundering bust. However, it is an opportunity to seek opportunistic buys: "Investors may be seeking opportunities outside the prime districts, where sellers may be more open to price negotiations," says Wong Siew Ying, PropNex head of research and content.
Buying activity could improve in 2H2024, adds Wong, as tourism and visitor arrivals continue to soar, and the 30-day visa-free arrangement between Singapore and China will make it easier for potential buyers to view properties.