After 10 years, JCUBE will be closing its door and making way for JCube condo residence, a 40-Storey residential and commercial JCube Residence development in the Jurong East region, with 1,760 private homes and 75,000 sq m of complementary uses.

Commercial shophouse sales saw a moderate performance in 1Q2023 as high interest rates caused cautious sentiment amongst buyers. Analyzing caveat data, 28 shophouses were sold during the quarter, which was less than the 35 recorded in 4Q2022. Freehold shophouses made up the majority of the sales. Transactional activity dropped by 46% from the same period the previous year, resulting in a 11.7% drop in transaction value to $278 million.

Underpinning the lower volume of transactions was that more than 80% of shophouse deals in 1Q2023 were priced above $5 million. Compared to 1Q2022 when $281 million worth of transactions were done, the value of transactions was down by 40.6% in 1Q2023.

District 8, comprising of Little India and Jalan Besar, had the most shophouse deals with a combined transaction value of $113 million. It made up 41% of total shophouse sales value in the quarter. Meanwhile, Districts 1 and 2 saw muted transactional activity, with three and two shophouses sold respectively. This is thought to be due to the lower availability of shophouses for sale in the area.

Unit price on land area experienced mixed growth y-o-y. Districts 1 and 2 saw their freehold and 999-year leasehold shophouses see unit prices dropped by 20% q-o-q. Contrastingly, Districts 7 and 8 saw a 8% q-o-q increase, with the rest of Singapore witnessing an 84.3% q-o-q growth.

For 99-year leasehold shophouses, unit prices in Districts 1 and 2 fell by 16% q-o-q though Districts 7 and 8 saw a strong 26% increase. There were no caveated deals in Districts 14 and 15 or in the rest of Singapore.

Shophouse rental activity remained stable in 1Q2023 with 886 rental contracts signed, a slight downturn from the 904 contracts in 4Q2022. Despite this, the total rent value was a record high at $9.54 million. Median rents were up to $5.98 psf per month, a slight increase from the $5.89 in 4Q2022.

Interest in commercial shophouses will likely remain strong despite global economic uncertainties and the hike in buyer’s stamp duty announced in Budget 2023. However, interest rates could affect activity as investors consider the impact this and firm prices have on net yields. Notwithstanding, prices are expected to remain resilient due to limited stock and healthy demand, whilst shophouse sales volumes in fringe districts will stay high due to the sought-after affordability these areas offer.

For the rental market, rental prices are expected to keep rising this year with the support of occupier demand due to the revival of tourism and retail industries, as well as the limited supply of shophouse spaces.