Investors set sights on non-conventional properties amid market downturn

Shophouses and dormitories are new targets.

Investors are setting their sights on non-conventional properties such as shophouses and dormitories amid the property market’s downturn, a report by Colliers revealed.

In the first quarter, for instance, property fund manager Pamfleet Group inked a $127m deal to purchase Homestay Lodge at Kaki Bukit Avenue 3.

Shophouses are also turning up on investors’ radars, especially when they are available in a contiguous row and allow for master lease arrangements.

For example, a fund managed by private equity property fund manager Phoenix Property Investors snapped up a row of six Peck Seah street shophouses for $42.80 million in January this year.

In the same month, a row of five adjoining freehold shophouses at Teck Chye Terrace was sold for $14.63 million at an auction held by Colliers International.

Following these two sales, shophouses at Sultan Gate, Pagoda Street and Hongkong Street, among others, were also transacted in the first quarter of the year.

“Given the relatively pale property market performance seen in the traditional residential and industrial investment clusters, investors are beginning to look at other non-conventional investment properties, such as dormitories and shophouses for higher returns on their investments,” stated the report.