Shophouse sales slump to near three-decade low, leasing activity and rents tumble
Shophouses in Districts 1 and 2 posted the steepest falls in average transacted psf prices based on land area. (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The Singapore shophouse market saw measured activity in the first three months of 2026, amid a subdued macroeconomic environment, geopolitical uncertainty, and a pricing mismatch between buyers and sellers.
Deal volumes slowed to levels not seen in nearly three decades and average transacted psf prices declined, according to the latest quarterly shophouse market report by PropNex Research.
This sluggish pace also carried through to the leasing market, where retail and F&B headwinds pulled leasing activity and rental contract values down to multi-year lows and dampened rents.
That said, the market remains nuanced, with some well-located premium assets continuing to demonstrate resilience.
Thin volumes on selective buying, price mismatch
In the first quarter of the year, there were just 13 shophouse transactions, based on caveats lodged.
That is a 43.5% q-o-q decline from the 23 deals in the fourth quarter of 2025, and a 35% y-o-y decrease from the 20 deals in the first quarter of last year.
Transaction volumes slid to a 28-year low — the most sluggish quarterly performance since 2Q1998 when 12 caveated deals were recorded.
Shophouse deal volume and total value (in $ millions):
Source: PropNex Research, URA Realis (data retrieved on April 21)
This comes as investors and businesses are becoming more cautious and selective amid macroeconomic headwinds, PropNex noted. Moreover, the uncertainty may have made some owners reluctant to sell their shophouses, which are seen as defensive assets, resulting in fewer properties being put on the market. A gap in buyer-seller price expectations could also have stalled deals.
Sales value totalled about $88 million from the 13 transactions during the latest quarter, shrinking by 48% q-o-q from about $170 million. It is also the lowest total shophouse sales value since the first quarter of 2009, which saw 39 deals worth $64.9 million.
The pullback in sales does not necessarily point to weaker buyer demand for shophouses, as it may also reflect buyers being more discriminating, PropNex wrote. Buyers may prefer assets in locations with resilient tenant profiles and high footfalls, and those with freehold or lengthy lease tenures.
A freehold shophouse on East Coast Road changed hands for $16 million. (Image: Google Maps)
The sale of a three-storey conservation shophouse, with a prominent frontage along East Coast Road, was the largest caveated transaction in 1Q2026, going by URA Realis data. In January, the freehold property fetched $16 million, which works out to a unit price of $8,911 psf based on the land area.
D1, D2 prices retreat while D7, D8 gain
The overall average transacted psf price, based on land area, decreased by 12.6% q-o-q to $4,963 psf in the first three months of this year.
“Some mixed-use shophouse deals could have put a drag on prices,” PropNex stated.
Districts 1 and 2 posted the steepest falls in pricing, with their average dropping by 15.5% q-o-q to $9,272 psf on land area. This was followed by Districts 14 and 15, where the average deal price was down by 10% q-o-q to $3,894 psf.
Average transacted price ($ psf on land area) of shophouses in selected districts:
Source: PropNex Research, URA Realis (data retrieved on April 21)
Bucking the trend were Districts 7 and 8, with the average transacted price gaining 21.9% q-o-q to $7,122 psf. These districts tend to be popular with buyers, due to the high footfall from locals and tourists.
Of note is a shophouse along Syed Alwi Road in the Little India Conservation Area. The freehold property set a new high for unit psf prices in District 8 when it changed hands for $10.25 million or $12,431 psf, based on land area, this March.
A shophouse on Syed Alwi Road was sold for $12,432 psf. (Image: Google Maps)
Weakest rental showing in years
Retail and F&B tenants continued to face challenges such as intensifying competition among operators, evolving consumer spending patterns and persistent manpower shortages, which affected their operational performance.
Against this backdrop, leasing volumes of shophouses hit their lowest level since the early stages of the pandemic in 2020.
There were 779 rental contracts signed in the first quarter of 2026, down 1.8% q-o-q from the final quarter of 2025, and the weakest showing since the second quarter of 2020 when 584 contracts were inked.
Meanwhile, the value of rental contracts slipped by 3.2% q-o-q to $8.12 million, marking the lowest value on a quarterly basis since the second quarter of 2021.
Shophouse leasing volume and total contract value (in $ millions):
Source: PropNex Research, URA Realis (data retrieved on April 21)
As for overall shophouse rents, the monthly median rental across Singapore softened to $6.39 psf. That is a slight decrease of 1.5% q-o-q and 1.1% y-o-y.
By district, the sharpest decline in median rents was 8.6% q-o-q to $7.22 psf in District 7 (Middle Road, Golden Mile), coming off a high base of $7.90 psf in the previous quarter.
On the other hand, the biggest q-o-q increase in median rents was 5.4% to $7.00 psf in District 2 (Anson, Tanjong Pagar). However, on a y-o-y basis, the district’s median rents saw the biggest decline of 9.1%, from $7.70 psf in the first quarter of 2025.
Median rentals ($ psf per month) of selected districts:
Source: PropNex Research, URA Realis (data retrieved on April 21)
“Locations that have prominent frontage, high patronage, strong leasing covenant, as well as shophouses in attractive lifestyle and tourism-led areas may be able to command higher rents,” the analysts wrote.
Cautious sentiment to persist
In the near term, some shophouse tenants might defer their expansion plans and be more cautious when it comes to renewing their leases, given the more subdued business outlook and heightened uncertainties.
Nonetheless, PropNex expects the continued recovery in the tourism industry to help support retail and F&B businesses.
The research team reckons transaction activity will remain moderate for the rest of the year.
It sees a more challenging landscape in 2026 for the overall shophouse market in Singapore.
In particular, the ongoing Middle East conflict is likely to affect business sentiment, push up energy prices and exert broader inflationary pressures. If interest rates increase, the higher borrowing costs may dull investment interest.
That said, PropNex thinks demand for shophouses — especially well-located and investment-grade assets — may be supported by Singapore’s safe-haven position.
“In an uncertain global economy, Singapore stands out as a stable and secure investment destination,” it noted.
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