According to research conducted by PropNex, the shophouse market experienced a relatively subdued performance in the last quarter, with only 18 shophouse transactions recorded in 2Q2025 based on caveats lodged. This represents a 10% decrease from the 20 deals recorded in the previous quarter and a 14.3% decline from the 21 deals in the same quarter last year.
The decline in shophouse transactions can be attributed to a continued mismatch in price expectations between buyers and sellers, as noted by PropNex. Additionally, the announcement of sweeping trade tariffs by the US in April and the escalating conflict in the Middle East have further contributed to market uncertainties.
The 18 shophouses sold in 2Q2025 had a total sale value of $127 million, which is a 6.6% increase from the previous quarter but a 35% decrease from the same quarter last year.
However, PropNex also highlights that the actual shophouse sales in 1Q2025 may be higher as some transactions may not have been lodged yet. These include the sale of 21 Carpenter, a 48-key boutique hotel, for $100 million and The Duxton Reserve Singapore, a 49-key hotel, which was reported to have sold for $80 million in early April.
Out of the 18 shophouse transactions, seven took place in District 8, covering the Little India and Jalan Besar areas, with a collective value of $53.1 million. The highest recorded transaction in the quarter was the sale of a shophouse in the Bukit Pasoh Conservation Area for $12 million in April.
Despite the decline in deals, PropNex notes that there were more big-ticket transactions in 2Q2025, with 14 shophouses selling for at least $5 million, compared to nine in the previous quarter.
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In terms of leasing, 800 shophouse rental contracts were signed in 2Q2025, a 4.9% decrease from the previous quarter. These rental contracts have a total value of $8.9 million, which is slightly lower than the $9.1 million recorded in 1Q2025. The monthly median rental for shophouses stood at $6.68 psf, representing a 3.1% increase from the previous quarter but a 2.2% decrease from the same quarter last year.
Separate research compiled by Knight Frank shows that shophouse transactions totalled 42 in the first half of 2025, with a total sales value of $462.9 million. This indicates a decrease in both volume and sales value from the second half of 2024, when 50 deals worth $520.2 million were recorded. However, prices remained relatively stable, with a slight increase of 0.5% to $6,431 psf on land in the first half of 2025.
Knight Frank also notes that the sale of 21 Carpenter and The Duxton Reserve Singapore were the two biggest shophouse transactions in the first half of the year. The report also highlights that living sector assets in shophouses are becoming more attractive to investors, as the F&B sector continues to face challenges.
Out of the 42 shophouse deals in the first half of 2025, 37 had freehold tenures, which accounted for $358.4 million of the total sales value. On the other hand, five deals had leasehold tenures, accounting for $104.6 million of the total sales value. The average unit price for leasehold shophouses saw a significant increase of 33.5% to $7,260 psf on the land area, compared to $5,440 psf in the second half of 2024.
Knight Frank also notes that nine shophouses sold in the first half of 2025 saw a capital appreciation of over 100%, with the highest return recorded at 600% for the sale of 63 Arab Street in May, after being held for 23 years.
Looking ahead, Knight Frank projects a slowdown in transactional activity in the shophouse market for the rest of 2025, due to escalating economic uncertainty. Similarly, PropNex expects a decrease in investment appetite for big-ticket purchases, as uncertainty and volatility continue to affect property investment demand. However, the recent decision by the government to extend the Seller’s Stamp Duty holding period for private residential properties may lead to an uptick in investment interest in the commercial real estate segment, including shophouses, as it is not subject to the SSD.