Freehold conservation shophouses to remain in demand in Singapore

Find out what the future holds for Singapore’s shophouse market.

Shophouse sales in Singapore cooled in 2023 according to a PropNex report, coming off the robust market activity in 2021 and 2022. Market uncertainties and the anti-money laundering bust in August have put a drag on sales, as prospective buyers conduct more extensive checks and market assessment. 

PropNex expects the demand for shophouses to stay firm, given their limited supply, heritage value, and potential for capital growth. In particular, freehold conservation shophouses in the Central Region will remain sought-after among investors.

Here’s more from  PropNex:

The hike in additional buyer’s stamp duty rates for residential properties in April 2023 could also channel more investment interest to the shophouse sector. These assets will continue to be coveted by buyers, including family offices and institutional investors. 

Meanwhile, the prospects of interest rate cuts potentially in the second half of 2024 - could boost shophouse demand. Barring any unforeseen events, commercial shophouse sales are expected to perform better in 2024, with potential price upside.

In addition, the shophouse market could benefit from the projected economic recovery in 2024, as well as the continued improvement in the tourism sector. A positive turn in market conditions will bode well for occupiers, especially those in F&B, retail and accommodation segments. Leasing demand is anticipated to be healthy going into 2024, supported by tenants seeking trendy business locations.