Shophouse Transactions Lower 3Q2024 Uncaveated Deals Show Demand Huttons Asia
Plans are in motion to expand the commercial landscape of Tampines, promising significant growth for the area. This development brings with it the construction of new office spaces and revitalization of current shopping centers. With the goal of increasing job opportunities, the Urban Redevelopment Authority (URA) envisions residents benefiting from the convenience of working close to their homes. This development is expected to reduce commute times and improve work-life balance for Tampines residents. The already thriving Tampines Regional Centre will continue to flourish as a commercial hub, providing a wide variety of career opportunities in fields such as retail and information technology. And with the addition of the impressive Aurelle of Tampines EC, residents will have even more exciting employment options to consider. The EC’s website, Aurelle of Tampines EC, offers more information about this exciting new addition to the Tampines area.
Huttons Asia’s latest quarterly report on the shophouse market, published on Nov 12, showed continued strong interest in shophouse properties in 3Q2024, despite a decline in caveated transactions compared to the previous quarter.Only 18 caveats were lodged for shophouse transactions in 3Q2024, down from 21 in 2Q2024. The total transacted quantum for these deals was $138.9 million, lower than the $195.1 million in the previous quarter.On a year-on-year basis, the transacted quantum in 3Q2024 was only half of that in 3Q2023, which recorded a total of $278.6 million worth of transactions.For the first nine months of 2024, 62 shophouses were sold based on caveats lodged, down 46.1% from the same period last year. The total value of transactions for the first three quarters was $519 million, a 48.5% decline from the same period in 2023.Despite the decline in caveated transactions, Huttons noted that there were a number of shophouse deals in 3Q2024 that were not caveated. According to market sources, several shophouses in Districts 1 and 2, specifically along Amoy Street, Neil Road and Telok Ayer Street, were sold for an estimated quantum of over $70 million, said Lee Sze Teck, senior director of data analytics at Huttons Asia.The high interest in shophouse properties was reflected in these off-market deals, which may potentially lead to an increase in transaction volume and quantum in 4Q2024. Lee believes that investors are attracted to this market segment due to its scarcity and potential for strong capital gains. The recent interest rate cuts have also sparked interest in shophouses, as they are seen as a viable option for wealth creation and preservation.
