Demand for Shophouses

Steep demand for shophouses has led to an increase in sale prices and rents, as SME companies turning to them due to short supply of office and high office rents.

8 shophouses in Telok Ayer St sold for $18.6m in Nov05, fetched $35m in Mar this year. Also, in an en-bloc sale of 4 units (6311sf) at Tras St, the transacted price was $7.7m in Nov06.

Shophouses rents at downtown areas (Tras St, Boon Tat St, Amoy St, Telok Ayer St) are commanding at $5-$6 psf/mth now, while fringe areas such as Beach Rd, rents have up from $2-$3 psf/mth to $3-$5 psf/mth.

However, shophouses rents are still much cheaper than office rents, which can be at $12-14 psf/mth in CBD and at $6-$8 psf/mth in fringe areas.

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Tink i saw tis in the newspaper recently, SingPost sold their HDB shop at Clementi Central at $8m. Also, SingPost reported in their annual report 06/07, the Hougang South shop was sold at $2.2m and Marine Parade shop at $5.7m.