shophouse transactions
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From an All-Time High in 2021, Shophouse Transactions Dropped in 2022

According to a report by Knight Frank, the number of shophouse transactions fell in the second half of 2022 as investors were cautious amid rising interest rates.

Between 2021 and the first half of 2022, the shophouse market consistently set records for the number of transactions. However, as interest rates rose above the yield from recurring shophouse income, institutional investors started to steer clear of the asset class, according to the real estate consultancy.

Shophouse transactions in Singapore

The total value of shophouse transactions in this country was $1.6 billion in 2022, after reaching an all-time high of $1.9 billion in 2021. The total sales value in 2020 was $912.7 million.

With 54 units accounting for 80.6% of the overall sales volume, freehold shophouses made up most of the 2022 second-half sales.

In the second half of 2022, there were 13 leasehold shophouse transactions totalling $155.3 million, which is less than two-thirds of the $242.2m recorded in the second half of 2021 and a decrease of 34.6% from the $237.6m in the first half of the year.

Despite the downturn, significant shophouse transactions were completed, including the row of 11 leasehold shophouses in Lavender Street sold in July for $71m.

The largest shophouse transactions in this area occurred in September when 8M Real Estate paid $40m for a row of five conservation shophouses in Jalan Besar. 

A shophouse unit at 35 Rowell Road sold for $4.9 million in October, a price nearly 21% higher than when it had sold in June for about $4.1 million.

Most buyers are anticipated to be family offices and private individuals, which could result in higher rents when they renovate the property and switch around the tenancy kinds.

According to Knight Frank, the shophouse market is not anticipated to reach the levels of 2021 and 2022 due to the current context of increased caution. $1.3b and $1.5b shophouse transactions are anticipated in 2023.

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I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.

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