2024-08-30-莱坊-Singapore_Shophouse_Market_Update_H1_2024_2页_510kb

Exhibit 1: Sales Volume and Average Unit Prices Q1-Q2 2023/2024

• Sales Volume & Price Decline: Shophouse sales volume declined significantly year-on-year:
  • H1 2024 Sales Volume: 40 units, total value S$354.0 million.
  • H2 2023 Sales Volume: 53 units, total value S$428.2 million.
  • H1 2024 saw a 24.5% (units/yr), 17.3% (value/yr) decrease compared to H2 2023.
  • Average unit price decreased by 56.5% from S$5,116 psf (land) in H2 2023 to S$2,225 psf in H1 2024.
• Intra-H1 Decline: Sales also slowed in H1 2024 compared to the first five months, with fewer units sold and lower average prices.

Exhibit 2: Top 5 High-Return Deals (H1 2024)

• High Returns: Six deals achieved returns over 100%, often via long-term holding and capitalizing on major refurbishment/conservation.
• Highest Return: 34 Bussorah Street (Kampong Glam) sold for S$4.5M, yielding 1,223.5% return after a 21-year hold.
• Upper/Middle Range Returns: Notable transactions included Dunlop Street (650% ROI, 22-yr hold) and Clive Street (425.5% ROI, 14-yr hold). Other properties sold for prices between S$5M-S$15M, with returns generally lower than the highest outlier but still positive or high.
• Property Example: Potential example: A property near Syed Alwi Road sold for S$14.4M, yielding a 349.4% return after 18 years.

Mainstream Market & Gentrification Effects

• Market Cautiousness: Overall market momentum slowed due to cautious buyer sentiment, impeded by higher interest rates and geopolitical tensions.
• Conservation Focus: Shophouses, as predominantly conservation properties, cannot be demolished and offer a model of sustainability by being refurbished.
• Value Enhancement: Refurbishment (adding value) attracts better tenants (e.g., co-living), increases valuation, and contributes to neighborhood gentrification and tourism (e.g., Little India).
• Freehold Dominance: Freehold shophouses dominated sales activity, accounting for most units (35 out of 40 in H1 2024).
• District Focus: District 8 consistently has the highest number of shophouse transactions, driven by gentrification.
• Supply Outlook: Boutique developers continue to target older shophouses for medium-term refurbishment projects, catering to the "added value" market and preserving existing stock.

Price Projections & Key Takeaways

• 2024 Forecast: Total sales value for 2024 is projected at S$700M-S$800M, significantly lower than the prior forecast of S$1.1-1.2B, reflecting continued muted conditions.
• UL Halted: The previously speculated Ultra Luxury Haven (UL H) development in HDB neighborhoods appears to have been halted.
• Asset Class & Stock: Despite the slowdown, the shophouse asset class remains popular, and Singapore's multigenerational consolidation policy helps preserve the stock of mature conservation properties.