Shophouses ripe for the picking

/ EdgeProp
January 3, 2019 12:00 PM SGT
21 Boon Tat Street was sold for $16.5 million ($4,259
The property cooling measures in July have influenced the super-rich to switch from luxury homes to an alternative asset class: conservation shophouses, which are in limited supply, especially those zoned for commercial use in the prime districts.
“After the cooling measures were imposed, we started getting more enquiries from people wanting to buy shophouses,” says Clemence Lee, JLL senior director of capital markets who specialises in shophouses. “Investors started to shift their focus towards commercial properties due to the higher stamp duties levied on residential property.”
Sales for shophouses in the 11 months from January to November 2018 have already hit $1.371 billion, based on URA data as at Nov 16. This is close to the peak in 2012, when $1.385 billion worth of shophouse deals were concluded. Lee is expecting fullyear sales in 2018 to exceed the record in 2012.
The total transaction value in 2012 was $1.38 billion but the number of transactions then was 291, according to JLL. In comparison, 156 shophouses have changed hands to date this year. This shows that the average value of shophouses transacted has almost doubled over the past six years (see table).
The shophouse at 64 Club Street was sold for $21.8 million ($3,880
Record prices
Before the property cooling measures took effect on July 6, the number of transactions for shophouses stood at 101. Post-cooling measures, 55 sales were logged, with new benchmark prices achieved in the latter part of the year.
The latest was set by the sale of 31 Keong Saik Road in November, according to a caveat lodged with...