Investor confidence returns as demand for rare heritage assets surges

Singapore’s shophouse market made a strong comeback in the third quarter of 2025, with both transaction volumes and sales values rising sharply as investors capitalized on lower financing costs and the city-state’s safe-haven appeal.

According to PropNex’s latest market update, 27 caveated shophouse deals were recorded in Q3. Up from 18 transactions in the previous quarter, marking the most active three-month period in nearly two years. The total value of these deals climbed 65.3 per cent quarter-on-quarter to S$210 million.

Year on year, sales volume jumped 50 per cent from Q3 2024, while overall transaction value rose about 31.5 per cent.

Steady Demand Despite Economic Headwinds

For the first nine months of 2025, 65 caveated shophouse transactions worth S$546.3 million were recorded. While this is slightly lower than the 62 deals worth S$519.1 million during the same period last year, analysts note that overall investor sentiment remains positive.

PropNex highlighted that the stabilizing interest rate environment, coupled with Singapore’s continued economic resilience, has helped revive buyer confidence. Knight Frank’s head of capital markets, Kent Fu, noted that more investors are now exploring shophouses as long-term wealth preservation assets amid market uncertainty.

Notable Transactions and Price Trends

Among the standout deals this quarter was the sale of 65 Club Street, which fetched S$21 million. Another major transaction involved three adjoining freehold shophouses along Jalan Besar on Desker Road, sold for S$36.5 million or approximately S$5,723 psf based on a built-up area of 6,380 sq ft.

Meanwhile, a Stanley Street property was acquired by Anpora Real Estate for over S$82 million. Nearly 60 per cent of all caveated Q3 transactions were above S$5 million, reflecting ongoing appetite for prime, centrally located assets.

Mixed Leasing Performance Across Districts

Leasing demand for shophouses remained largely stable, with 816 rental contracts signed, a 2 per cent increase from the previous quarter. However, rental values fell 4 per cent to S$58.6 million, while median rents slipped 1.3 per cent to S$6.95 psf per month.

Districts such as the CBD, Chinatown, and Golden Mile recorded the highest rental activity, while District 14 (Geylang and Paya Lebar) saw the steepest quarterly decline of 21.5 per cent in total rental value.

Positive Momentum Likely to Continue

Analysts expect Singapore’s shophouse market to stay resilient in the near term, supported by limited supply, strong heritage value, and consistent local and foreign investor demand.

With financing conditions improving and buyers showing renewed interest in well-located conservation assets, market watchers believe transaction volumes could remain firm through 2026 and continue to position Singapore’s shophouse sector as a prized component of the country’s real estate landscape.