Shophouse sales value down 43% q-o-q following muted market activity: PropNex

In 1Q2025, 19 shophouses changed hands, a 21% q-o-q decline in transaction volume from the 24 properties sold in 4Q2024. On a yearly basis, it marks a 17% fall in transaction volume in the asset class from the 23 deals recorded in 1Q2024, according to PropNex Research’s April 24 report. 

However, the actual sales figures in 1Q2025 are likely to be higher as the caveats for some transactions may not have been lodged, notes PropNex. 

In terms of total transaction value, shophouse deals in 1Q2025 amounted to about $100 million, a 43% q-o-q drop from the $175 million recorded in 4Q2024 and a 46% y-o-y fall from the $185 million recorded in 1Q2024. 

PropNex attributes the pullback in shophouse sales volume and value to several factors, including geopolitical tensions, the potential impact from trade tariffs imposed by the US, and a mismatch in pricing expectations. “Investors are likely more cautious, amid macroeconomic uncertainties,” says the agency. 

Of the 19 caveated shophouse transactions recorded, most transactions occurred in District 8 (Little India, Jalan Besar) and District 19 (Serangoon Garden, Hougang, Punggol), which jointly topped sales within the quarter. Both districts recorded five deals each, valued at $24 million and $19 million, respectively. 

Based on URA caveats, the priciest shophouse transaction in 1Q2025 was the sale of a shophouse in the Telok Ayer Conservation Area. The 999-year leasehold shophouse was sold in January for $14.8 million, or $12,488 psf based on a land area of 1,185 sq ft. 

The second-most valued deal of the quarter was the sale of two adjoining shophouses along Lorong Liput for $11.8 million. The properties sit on a plot spanning 1,679 sq ft, reflecting a price of $7,027 psf based on land area.

The agency highlighted a decline in “big-ticket” shophouse purchases for the quarter. Of the 19 shophouse deals, 42% were priced at above $5 million, while the remainder (58%) were priced at below $5 million. 

Leasing demand for shophouses also slowed during the first three months of the year, notes PropNex. 1Q2025 saw 836 rental contracts signed, valued at $9.1 million, marking a 4% q-o-q drop in leasing volume from the 871 contracts signed in 4Q2024 and a 6% q-o-q drop in rental value from $9.7 million in 4Q2024. 

Despite the decrease in rental contract value, shophouse rents were mostly flat 1Q2025. The quarter recorded a monthly median rental of $6.47 psf per month (pm), inching upwards by 0.3% q-o-q from $6.45 psf pm in 4Q2024 and by 0.6% y-o-y from $6.43 psf pm in 1Q2024. 

PropNex also notes that shophouse rentals saw mixed performance across selected districts, following high overhead costs coupled with cautious consumer spending.

District 15, which comprises Katong and Joo Chiat, saw the highest rental increase last quarter, recording a 12.2% q-o-q increase in median rents to $6.33 psf pm. It was followed by District 7 (Middle Road and Golden Mile) which saw a 6.4% q-o-q increase in monthly rent. 

Meanwhile, District 8 (Little India) saw the steepest drop in its median rental price, falling by 9.2% q-o-q from $5.65 psf pm to $5.13 psf pm. 

In terms of market outlook, PropNex expects shophouse transactions to be relatively muted in the upcoming quarters due to the announcement of trade tariffs by the US and the resulting  increased market uncertainty. 

That said, the agency anticipates that shophouse leasing demand could be stable in the near term. “In view of the uncertainties, it is likely that some occupiers may refrain from taking up more space, or relocate to pricier areas,” says PropNex.