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Prices of commercial shophouses expected to rise

Jul 12, 2023

As reported by Channel NewsAsia, market analysts are foreseeing a rise in prices for commercial shophouses due to high demand and limited availability. Prices could increase by around 10% based on location. This trend is driven by international investors seeking safe haven assets, uncertain economic conditions, and potential rental growth. Recent property market regulations also play a role, as uncovered by Rebecca Mateo. Notably, Liberty House sold for $92 million in April, and buyers have been actively pursuing shophouses valued above $20 million.

Market watchers are also reporting significant interest in shophouses primarily from Indonesia, China, and Malaysia. Property funds and other investment companies are also exploring shophouses as an alternative asset class. Buyers are typically holding companies, and the recent property curbs, including higher taxes on private properties for foreigners, have redirected interest from residential properties to the commercial shophouse market, which offers a more favourable investment landscape.

Shophouses have gained attention due to their exemption from additional buyer’s stamp duty and the absence of restrictions on foreign ownership of commercial shophouses. Limited supply and increased offers from buyers have prompted owners to raise prices. However, new investors seeking shophouses for investment purposes face higher premiums and limited availability. Market watchers predict strong interest in shophouses to persist in the next half of the year.

Currently, owners are not eager to sell their shophouses, considering them as prized assets with potential price appreciation in the upcoming months.

Are you an owner of such property? Is your company looking for additional working capital for business operations? At Prime Financial Services, we can finance against up to 80% of the property valuation for your company’s working capital requirement. Call us today or drop an email to us for more details.