Shophouse Market Activity Stays Subdued 2Q2025
The latest research by PropNex revealed that the shophouse market remained subdued in the second quarter of 2025. Only 18 transactions were recorded based on caveats lodged, a 10% decline from the previous quarter and a 14.3% decrease from the same period last year.
According to PropNex, this decline can be attributed to the mismatch in price expectations between buyers and sellers. Additionally, the ongoing trade tensions and conflicts in the Middle East have added to the uncertainties in the market.
The 18 transactions recorded in 2Q2025 had a total sale value of $127 million, representing a 6.6% increase from the previous quarter but a significant 35% decrease from the same period in 2024.
However, it should be noted that the actual number of shophouse sales may be higher as some transactions may not have been lodged. These include the reported sale of the 48-key boutique hotel, 21 Carpenter, for $100 million and the 49-key hotel, The Duxton Reserve Singapore, which was said to have been sold in early April for $80 million.
Out of the 18 shophouses sold, seven were located in District 8, which covers the Little India and Jalan Besar areas. The total value of these transactions was $53.1 million, with the highest recorded sale being a shophouse in Bukit Pasoh Conservation Area for $12 million in April.
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PropNex also highlighted that although there was a decline in the number of deals, there were more high-value transactions. 14 shophouses were sold for at least $5 million, surpassing the nine sold in the previous quarter.
In terms of leasing, 800 shophouse rental contracts were signed in 2Q2025, a 4.9% decrease from the previous quarter. The total rental value amounted to $8.9 million, lower than the $9.1 million recorded in 1Q2025. The monthly median rental for shophouses stood at $6.68 psf, a 3.1% increase from the previous quarter but a 2.2% decrease compared to the same period last year.
According to Knight Frank’s research, 42 shophouse transactions were recorded in the first half of 2025, amounting to $462.9 million. This represents a decline in both volume and sales value from the second half of 2024, where 50 transactions worth $520.2 million were recorded. Prices remained relatively flat, with a 0.5% increase to $6,431 psf on land area in the first half of 2025.
The two largest shophouse transactions in the first half of 2025 were the sale of 21 Carpenter and The Duxton Reserve Singapore, according to Knight Frank. Mary Sai, executive director for capital markets at Knight Frank Singapore, noted that with the challenges faced by the F&B sector, living sector assets in shophouses have become more attractive to investors.
Out of the 42 shophouse transactions, 37 were freehold units, with a total sales value of $358.4 million, a decrease from $480.8 million recorded in the second half of 2024. The remaining five were leasehold units, which accounted for a total of $104.6 million, an increase from the $39.4 million recorded in the second half of 2024. The average unit price for leasehold shophouses also saw a significant increase of 33.5% to $7,260 psf on land area compared to $5,440 psf in the previous period.
Knight Frank also noted that nine shophouses sold in the first half of 2025 saw a capital appreciation of over 100%, with the largest return being the sale of 63 Arab Street for $7.7 million, recording a return of 600%.
Looking ahead, Knight Frank expects the market to experience a slowdown in transactional activity as a result of the current economic uncertainties. They project a total of $700 million to $800 million in shophouse sales for the whole of 2025, lower than the $947.8 million recorded in 2024. Similarly, PropNex has a cautious outlook and believes that prolonged periods of uncertainty and volatility will impact investment appetite, especially for big-ticket purchases.
However, the recent extension of the Seller’s Stamp Duty holding period for private residential properties from three to four years, effective July 4, could drive investors towards the commercial real estate segment, which is not subject to the SSD. As a result, there may be an increase in investment interest for shophouses as an alternative asset, according to PropNex.
