2023-07-30-莱坊,Knight_Frank,KNIGHTFRANK-Singapore_Shophouse_Market_Update_H1_2023_2页_636kb

Summary of Singapore Shophouse Market Analysis (H1 2023)

Key Highlights:

• Sales volume in H1 2023 reached S$711.6 million with 75 units sold, averaging S$5,454 psf on land, an increase of 7.2% in value and slightly more units compared to H2 2022 (S$663.5 million, 72 units). The sales growth was driven by factors such as increased buyer interest due to stricter residential cooling measures and the removal of "commercial and residential" land-use zones.
• District 8 was particularly popular, with 27 shophouses sold for S$259.4 million, led by the high-value transaction of six adjoining freehold shophouses along Serangoon Road for S$62.5 million, which ranked as the top deal in H1 2023.
• Freehold shophouses dominated the market (59 sales, S$5,983 psf), showing strong capital appreciation with average prices up 37.6% from H2 2022. High-return investments were noted, such as a Boat Quay property sale yielding 631.7% profit after 23 years.
• Leasehold shophouses performed less strongly, with S$139.0 million in sales, down 15.7% from H2 2022 in value but stable in unit count. Gentrification and cultural heritage value remain key drivers, attracting wealthy foreign and local investors seeking diversification in commercial real estate.
• The market outlook is positive, with expected full-year sales volumes of S$1.3 to S$1.5 billion, fueled by sustained tourism growth and institutional investor interest despite economic uncertainties.

Market Trends:

• Key drivers include Singapore's ongoing gentrification, rise in tourist arrivals, and preference for shophouses in trendy locations like Little India and conservation areas, offering unique cultural and investment opportunities.
• Challenges include cautious buying due to high interest rates, with some unreported transactions adding uncertainty to the data.

Source: URA Realis and Knight Frank Research (Data as of 18 July 2023)