Singapore’s shophouse market demonstrated substantial recovery in the third quarter of 2025, with transaction volumes and values surging amid a confluence of lower financing costs and renewed investor optimism.
Singapore’s shophouse market surged in Q3 2025 as lower financing costs and investor optimism fueled substantial transaction recovery.
The quarter recorded 27 caveated shophouse deals, representing a 50 percent year-on-year increase from the previous period and a marked escalation from 18 transactions in Q2 2025. Transaction value reached S$210 million, reflecting a 65.3 percent quarter-on-quarter increase and a 51.3 percent year-on-year rise, marking the highest quarterly sales volume in approximately two years. Notable transactions included 59% of deals exceeding S$5 million, demonstrating robust activity in the high-value segment.
The first nine months of 2025 accumulated 65 shophouse transactions valued at S$456.3 million, establishing a robust foundation for market activity. This performance reflects the commercial shophouse market rebound observed across the broader commercial real estate sector in Q3 2025.
Knight Frank projects full-year 2025 sales volumes in the S$700 to S$800 million range, a moderation from 2024’s S$947.8 million. This is partly due to fewer large-ticket transactions anticipated in the final quarter.
The market resurgence reflects moderating interest rates and easing domestic financing costs. These factors have catalyzed investor re-entry and improved sentiment among both buyers and sellers.
Family offices, high-net-worth individuals, and institutional investors constitute the primary buyer cohort, drawn by Singapore’s safe-haven status and the asset class’s inherent scarcity. Proper tenant screening becomes increasingly important for investors looking to maximize returns from their commercial property acquisitions.
Renewed confidence stems from easing US-China trade tensions, positive macroeconomic projections, and expectations of continued monetary policy support. These factors are positioning shophouses as inflation hedges within a low-rate environment.
Singapore’s economy expanded 1.3 percent quarter-on-quarter in Q3, following a 1.5 percent rise in Q2. This supports investor confidence in sustained macroeconomic stability.
Tourism sector strength bolsters retail and food-and-beverage tenancy prospects.
Broader commercial property investment volumes surged 64.3 percent quarter-on-quarter to S$10.3 billion, the highest level in seven years, reflecting widespread market recovery.
The rental market exhibited mixed performance. Quarterly rental contracts increased 2 percent to 816 transactions, though transaction value declined 4 percent to S$8.6 million.
Median monthly rental decreased 1.3 percent quarter-on-quarter to S$6.59 per square foot.
District 7 and District 8 demonstrated rental growth at 9 percent and 8.7 percent respectively, while District 14 experienced a 21.5 percent decline, alongside contractions in prime Districts 1 and 2.
