Despite a drop in caveated transactions, interest in the shophouses was strong in 3Q2024, according to most recent quarterly shophouse market analysis released on Nov 12.
Shophouse sales in 3Q2024 came with eighteen caveats, less than the twenty-one caveated deals in 2Q2024. In 3Q2024, the caveated shophouses traded $138.9 million overall, 28.8% less than the $195.1 million prior quarter. This is half of the transacted amount of $278.6 million on y-o-y basis.
Caveats for the first nine months of 2024 reveal that 62 shophouses were sold, 46.1% less y-o-y than the caveated shophouse sales in the same time previous year. Compared to the same time in 2023, the total value of transactions for the first three quarters of 2024 is $519 million, 48.5% lower.
Huttons’s report highlights that some shophouse agreements in 3Q2024 were not caveated despite the drop in transaction volumes. Lee Sze Teck, senior director of data analytics at Huttons Asia, claims based on market sources that numerous shophouses along Amoy Street, Neil Road and Telok Ayer Street in Districts 1 and 2 were purportedly sold. He said, the projected quantum for these shophouses is more than $70 million.
The offers reflect the demand for shophouses, which Lee notes has grown in the previous three months. The lack of this market sector and possible high capital returns attract investors in this area. Shophouses are becoming trendy as a wealth generation and preservation tool with the interest rate reduction in the last several months. He also thinks that in 4Q2024 shophouse transaction volume and quantum might increase.
