What lies ahead for the shophouse market in Q4?

Ultra-wealthy investors may take profits and shift to safe-haven assets.

Demand for shophouses is expected to stay resilient in the final quarter of the year (Q4), supported by lower borrowing costs and recent gains in global equity markets, according to a Huttons report.

Transaction volumes and prices are likely to remain steady in Q4, as ultra-high-net-worth investors may take profits and invest in physical assets in safe havens such as Singapore.

“Shophouses, being a rare asset class with no new supply, may appeal to investors seeking strong capital returns,” said Lee Sze Teck, Senior Director, Data Analytics at Huttons.

In Q3, an estimated 28 transactions were recorded, up from 20 in the previous quarter and 18 a year earlier. Total transaction value reached $292.5m, 25.6% higher than in Q2.

“Transaction volume and quantum were higher in Q3 due to purchases by funds and institutional investors,” Lee added.

Furthermore, 68 transactions were recorded with an aggregate value of $644.5m for the first nine months of the year—about 10% more deals and 24% higher value than the same period in 2024.

Asia Success Management, affiliates of Clifton Partners, and KB One Pte Ltd were behind several large transactions valued at $15m and more in Q3. The biggest sale involved six adjoining units along Stanley Street that changed hands for $82.4m on a 99-year leasehold.

Other notable deals included Jalan Besar at $36.5m, Club Street at $21m, Outram Road at $15m, and Kampong Bahru Road at $14.9m.

Meanwhile, close to 90% sold in the quarter are less than $15m. Districts 8 and 15 accounted for almost half of all sales, with most units priced under $10m.

“85.7% of the shophouses sold in Q3 are on land with a 999-year/freehold tenure,” the report said.

Leasing volume of shophouses inched up by 1.9% quarter-on-quarter to 816. Meanwhile, rents dipped to $6.59 psf/month from $6.68 psf/month the quarter prior, it added.