The quarter also saw an increase in shophouse rentals, with a 2.6% q-o-q uptick in gross rental yield in 3Q2024, compared to a 1.8% decline in the previous quarter. This marks the third consecutive quarter of rental increase since 1Q2024.
SINGAPORE (EDGEPROP) – Despite a slight dip in the number of caveated transactions, the shophouse market continued to attract strong interest in 3Q2024, according to the latest quarterly shophouse market report by Huttons Asia, published on Nov 12.
The number of caveated shophouse transactions dropped from 21 in 2Q2024 to 18 in 3Q2024, with a total transacted quantum of $138.9 million. This is a 28.8% decrease from the previous quarter’s $195.1 million. On a year-on-year (y-o-y) basis, the figure was half of 3Q2023’s transacted quantum of $278.6 million.
Caveats show that 62 shophouses were sold in the first nine months of 2024, marking a 46.1% y-o-y decline compared to the same period last year. The total value of transactions for the first three quarters of 2024 is $519 million, down by 48.5% from the same period in 2023.
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Despite the dip in transaction figures, Huttons’ report notes that several shophouse deals were not caveated in 3Q2024. “According to market sources, shophouses along Amoy Street, Neil Road, and Telok Ayer Street in Districts 1 and 2 were reportedly sold,” says Lee Sze Teck, senior director of data analytics at Huttons Asia. The estimated quantum for these shophouses exceeds $70 million, he adds.
These deals are a testament to the demand for shophouses, which has seen an uptick in recent months, according to Lee. “Investors are drawn to this market segment for its scarcity and potential for strong capital gains. With interest rates falling in the past few months, shophouses have become more popular as a wealth creation and preservation asset.” He also predicts that shophouse transaction volume and quantum may rise in 4Q2024.
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The quarter also saw an increase in shophouse rentals, with a 2.6% q-o-q uptick in gross rental yield in 3Q2024, compared to a 1.8% decline in the previous quarter. This marks the third consecutive quarter of rental increase since 1Q2024.