Shophouse sales breach new high with 118 transactions in H1

Knight Frank expects sales values for the full year to exceed the $1.46b high posted in 2018, with sales volumes to cross the 200 unit mark.

Shophouse transaction volumes hit a new high in the first half (H1) of 2021, with 118 units changing hands, breaking the 99 transaction record in H1 2018.

Total shophouse transaction values saw a 29.9% increase in the first half of the year to $836.1m, as activity picked up since the end of last year, according to a Knight Frank report.

Broken down, total transaction values were at $365.4m and $470.7m in the first and second quarters of 2021, more than double the $117.0m transacted in the second quarter of 2020.

Whilst freehold shophouses accounted for 78.8% of the transactions in H1 2021, leasehold sales volumes more than doubled to 25 units compared to the second half (H2) of 2020.

Over half of the leasehold transactions were located in District 2 (Anson, Tanjong Pagar).

Knight Frank also noted a shift in interest towards fringe area shophouses, with District 8 (Little India) seeing a record-high sales volume of 26 shophouses, selling for an average of $4.2m. Of the 26 sold, 18 had prices below $5m. Prices in District 15 were also below $4.5m.

Districts 1 (Raffles Place, Cecil, Marina, People’s Park) and 2 continue to be the more sought-after areas for shophouses, recording 15 and 20 transactions, respectively. Amongst the most expensive shophouses sold for the first half was at $11.5m on average in Tras Street.

Whilst unit prices of freehold shophouses dipped by a marginal 0.4% compared to the last half, with an average of $4,344 per square foot (psf) on land, this was a 59.5% jump from the same period last year during the Circuit breaker. Average leasehold prices increased by 4.9% to $4,418 psf.

Approximately 56.8% of the shophouses sold in H1 were priced above $5m, higher than the 42.2% with similar prices in H2 2020.

After 15 years, a fully tenanted three-storey conservation shophouse with an attic at 91 Tanjong Pagar Road finally sold for more than five times its previous sale price at $10.5m. Meanwhile, a shophouse at 13 Ann Siang Road was sold at $9.3m, 9.2% above its previous sale price, despite being held for less than a year.

Moving forward, Knight Frank expects sales values for the full year to exceed the $1.46b high posted in 2018, with sales volumes to cross the 200 unit mark.