Shophouses are a rare commodity in land-scarce Singapore, what with their heritage, location and floor area. Though the property cooling curbs of 2013 have caused a dink in the market with limits placed on bank lending but recent figures have shown an increase in transaction value over the past 2 years.
The total value of shophouses sold since 2015 have risen 7.6 per cent from $657.3million to $707.07 million last year. Though the number of caveats lodged remained steady at about a 100 a year, property players are beginning to see a renewed interest in these properties as investors continue to view them as rare with considerable growth potential. Rental rates for shophouses fall within the 2.5 to 3.5 per cent range. Most of the investors who are able to afford these valuable real estate are however wealthy individuals or family businesses or international property funds with $10 million to $50 million to spare.
Some of the more notable transactions last year included 3 adjoining 99-year tenure shophouses in Amoy Street which were acquired for $59.6 million. Another shophouse in Boat Quay sold for $12.9 million to a family business and CBRE currently has 3 commercial shophouse units in Holland Village, Chinatown and Kampong Glam available for purchase. The units are priced between $6 million to $28 million. Changes in the office sector may have slight effect on the shophouse market, but even as more units are put up for sale this year, industry experts are expecting a 5 per cent rise in shophouse prices.