Demand from Chinese buyers drives up costs of commercial conservation shophouses in key areas.
SINGAPORE: The cost of conservation shophouses in Singapore has surpassed $7,000 per square foot (psf), with Chinese investors playing a significant role in the price surge, according to a report by Edgeprop published on April 25.
Loyalle Chin, director at PropNex ShophouseHuat and associate group division director at PropNex Realty, highlighted that overseas investors, especially from China, are setting new price records for commercial shophouses in the Central Business District (CBD). “A new influx of international buyers, including many from China, are driving the prices of CBD shophouses to unprecedented levels,” said Chin.
A recent sale involved a two-storey, 999-year leasehold conservation shophouse on Amoy Street, which went for $21.8 million earlier this month, translating to approximately $6,998 psf. In November of the previous year, Chin had brokered the same property for $18.7 million, or $5,999 psf, reflecting an almost 17 percent price increase within a few months.
The buyer, NC Properties, has connections to Hong Kong’s New Century Group, which has also made investments in conservation shophouses on Telok Ayer and Circular Road.
Richard Tan, senior associate group district director at PropNex, confirmed that other commercial properties in the CBD and Chinatown have also been sold for prices exceeding $7,000 psf.
Chin further explained that some Chinese investors who initially wanted to use Good Class Bungalows (GCBs) in prime locations for commercial activities were drawn to shophouses after realizing that GCBs cannot be used for such purposes. Shophouses, on the other hand, offer the flexibility to host nightclubs or public entertainment venues, provided the appropriate licenses are obtained.
This type of property has become particularly attractive to wealthy Chinese buyers, as it allows them to host events, live performances, and social gatherings. One example is the Amoy Street property, currently home to the Havana KTV Nightclub, which will see its lease expire in June.
