Shophouse sales hit near three-decade low as investors become more selective

More than 60% of shophouses sold in Q1 2026 were less than $5m,

Quarterly sales of shophouses plunged to their lowest level since Q3 1998 as investors turned increasingly selective amidst an uncertain geopolitical and economic environment, according to Lee Sze Teck, senior director, data analytics at Huttons.

Investors preferred shophouses which are tenanted to tenants with a strong profile for stability of returns.

Based on caveats, an estimated 13 shophouses were sold in Q1 2026, 40.9% lower quarter-on-quarter (QoQ) and 35% lower year-on-year (YoY).

The total quantum of shophouses sold in 1Q 2026 fell by 44.2% to $88.4m from $119.2m in 4Q 2025. On a YoY basis, it was 25.8% lower.

The average quantum of shophouses sold in Q1 2026 was $6.8m, 5.5% lower than the previous quarter’s $7.2m.

Meanwhile, more than 60% of the shophouses sold in the first quarter of the year are less than $5m, the highest percentage since Q2 2020 when sentiments turned cautious after the outbreak of the Covid-19 pandemic.

Leasing conditions in the shophouse market slid further in Q1 2026, continuing a downtrend since 3Q 2024. The number of rental contracts declined by 1.8% to 779 in 1Q 2026 from 793 in the previous quarter and 8.7% lower YoY. Median rents eased by 1.5% to $6.39 psf/month in Q1 2026 from Q4 2025’s $6.49 psf/month.

Interest in shophouses has been steady since the start of the year but Huttons said the prolonged conflict in the Middle East may weigh on sentiments in the short term.

“Whilst some investors are biding their time for a high-value opportunity, property owners are leveraging market scarcity to maintain high asking prices. Transactions are expected to increase once the Middle East conflict is resolved,” Lee said.