​​SG sees highest-ever shophouse transaction value in 2021 at $1.9b

This exceeds 2019 and 2020’s combined transaction values.

Singapore saw its highest-ever shophouse transaction value in 2021, with a total of $1.9b sales.

This exceeds 2019 and 2020’s combined transaction values of $915.9m and $912.7m, respectively.

Knight Frank, in its commentary, said the overall sales value in 2021 was pushed by higher transacted values.

There were some 244 transactions in 2021, and more than half of them were above $5m.

Several bulk sales, like that of the three adjoining mixed-use redevelopment sites at Bukit Timah/Duke’s Road for S$53.9m, also contributed to the sales, according to Knight Frank.

Other notable sales for 2021 include the Porcelain Hotel at the Kreta Ayer Conservation Area to RB Family Office for$90.0 million; a pair of shophouses at 202 and 204 South Bridge Road was sold in August for $35 million; a shophouse at 14/A Stanley Street sold for 34.8% above the previous sale price after being held for less than a year.

Freehold transaction volumes and value likewise rose in 2021 by 51.6% year-on-year (YoY) to 194, and 84.1% YoY to $1.5b.

Over 30% of freehold transactions in the year were in District 8, and more than 25% in District 14 and 15, Knight Frank said.

An uptick was also seen in leasehold shophouses, with its transaction volume rising from 17 to 50 in 2021. About 60% of leasehold transactions were in the prime District 1 and 2.

In terms of average unit prices, leasehold shophouses ($5,100 per square foot (psf) on land) were 15.5% higher than freehold shophouses ($4,414 psf on land).

Unit prices of leasehold shophouses largely fluctuated depending on specific shophouses sold as there were fewer transactions, averaging S$5,100 psf on land in 2021.

In 2022, Knight Frank said total sales value for the shophouse market could reach $2b.

The analyst said investor interest for shophouses in 2021 would likely spillover, on the back of the recent imposition of cooling measures.

“Commercially zoned shophouses remain unaffected by the latest government measures. Steady gentrification in shophouse districts will also continue to fuel demand…Especially so, with the moderate spillover effects from investors in the residential sector,” the analyst said.