Lower shophouse sales, leasing activity in 4Q2025
The three adjoining shophouses at 203,205 and 207 Jalan Besar were sold for $36.5 million on Sept 25. (Photo: Knight Frank Singapore)
Singapore shophouse activity eased in 4Q2025, with lower sales and leasing activity. According to research by PropNex, 22 shophouse transactions were logged last quarter, based on caveats lodged. This is 21.8% lower than the 28 deals recorded in the previous quarter. On a y-o-y basis, sales were down by 12% from 25 transactions in 4Q2024.
The 22 shophouses transacted in 4Q2025 were sold for a total of $158.3 million, showing a 27.6% decline q-o-q and a 12.2% decline y-o-y. The biggest transaction last quarter was the December sale of a five-storey shophouse on North Canal Road in Clarke Quay for $23.9 million. The price works out to $13,810 psf on the property’s land area of 1,730 sq ft.
In a separate research report, Knight Frank Singapore observes that 54 shophouse transactions occurred in 2H2025, higher than the 42 sales in 1H2025. Despite the increase in the number of shophouses sold, sales value fell from $462.9 million in 1H2025 to $416.8 million in 2H2025.
Knight Frank attributes the lower sales value to a higher number of deals with smaller price quantums in the second half of last year. Some 33 shophouses changed hands at prices less than $10 million in 2H2025, compared to 43 such deals in 1H2025.
As a result, the average unit price for shophouses dropped from $6,431 psf on land area in 1H2025 to $4,663 psf on land area in 2H2025, reflecting a 27.1% decrease.
There were 42 freehold shophouses transacted in 2H2025, slightly more than the 37 sold in 1H2025. However, the total sales value dropped by 12.9%, from $358.4 million in 1H2025 to $312.2 million in 2H2025. This translates to a 32.7% fall in average unit price, from $6,217 psf to $4,187 psf on land area.
Meanwhile, there were 12 leasehold shophouse transactions, up from the five lodged in 1H2025. Sales volume totalled $104.5 million in 2H2025, on a par with the $104.6 million recorded in 1H2025. The average unit price based on land area decreased by 6.9% from $7,260 psf in 1H2025 to $6,757 psf in 2H2025.
The largest shophouse transaction in 2H2025 was the sale of a portfolio of three freehold shophouses along Jalan Besar for $36.5 million in September 2025. The price works out to $5,723 psf on the land area of 6,378 sq ft.
For the whole of 2025, 88 shophouse deals amounting to $632.2 million were transacted, slowing from $699 million in shophouse sales in 2024, based on caveats lodged. “Although shophouse sales picked up in the second half of 2025, the uptick was unable to make up for the slack in transactions in the first half, particularly in 2Q2025 where uncertainties due to the sweeping US trade tariffs affected market confidence and investment interest,” states PropNex in its research report.
Source: PropNex Research, URA Realis
Based on the full-year figures, the total sales value in 2025 is also the lowest since 2014, when 106 deals valued at $585 million were sold, the company adds.
Meanwhile, Knight Frank estimates 96 shophouses were sold in 2025 for a total sales value of $879.7 million, or an average unit price of $5,471 psf on land area, compared to 95 units sold for $947.8 million, or an average of $3,794 psf on land area, in 2024. The firm adds that more transactions likely occurred but were not caveated or reported.
Lower leasing activity
For shophouse leasing activity, PropNex reported a 5.5% q-o-q decline to 775 rental contracts signed in 4Q2025, from 820 rental contracts signed in 3Q2025. The value of rental contracts signed also fell by 4.1% q-o-q to $8.25 million, in comparison to $8.6 million in 3Q2025.
According to URA Realis data, the median monthly rent for shophouses slipped 1.4% q-o-q in 4Q2025 to $6.50 psf per month, but crept up 0.8% y-o-y. Across different districts, District 7, comprising shophouse properties at Middle Road and Golden Mile, saw the highest quarterly rental growth of 11.9%, followed by District 1 (+9.9% q-o-q) and District 8 (+5.9%). On the other hand, shophouses in District 2, in areas like Anson and Tanjong Pagar, saw median rents fall by 12.6% q-o-q. Shophouses in District 14 also recorded lower median rents, declining 5.7% q-o-q.
The lower leasing activity in 4Q2025 comes amid a tough landscape for retailers and F&B operators, says PropNex. “Intense competition, shifting consumer spending habits and manpower shortages continued to weigh on such operators who are one of the demand drivers for shophouse space,” its report adds. Over 2,400 F&B establishments were reported to have closed in the first 10 months of 2025.
PropNex expects the challenging environment will continue to put downward pressure on shophouse rents, with more occupiers potentially deferring expansion plans and reassessing lease renewals. The firm anticipates future occupier demand for shophouses will be uneven, with occupiers leaning towards prime areas such as Chinatown, Telok Ayer and Little India as they benefit from higher footfall.
Stable activity expected in 2026
Within the wider market, PropNex expects commercial shophouses to continue to appeal to buyers, including family offices and institutional investors, that remain on the lookout for well-priced, defensive assets.
It predicts that the shophouse market could see some upside in 2026, supported by a cautiously optimistic economic outlook as well as positive buyer sentiment following US Federal Reserve interest cuts last year. To that end, the firm is predicting that shophouse capital values will see stable growth this year.
Knight Frank notes that despite leasing challenges, shophouse owners generally remain firm on their asking prices, supported by limited supply and the long-term value proposition of shophouses. On the flipside, investor appetite is expected to remain measured, with interest largely focused on freehold assets or shophouses with long remaining lease tenures. As such, the firm is projecting total shophouse transaction value to remain “just below $1 billion” this year.
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