Shophouse investment sales in Singapore a bright spot in virus-ravaged 2020: Colliers

AS the Covid-19 pandemic put a dent on overall property investment activity in 2020, shophouses in Singapore proved an exception as the only other segment after commercial and mixed-use to improve from 2019.

According to real estate services and investment management company Colliers International, 18 shophouses - each over S$10 million and worth a total of S$288 million - transacted in Q4 of 2020 alone.

This marks the best quarterly showing since Q1 2018's S$401.7 million record, and brings shophouse investment sales for the full year to S$467 million. It represents a 16.1 per cent increase from 2019 figures even as overall 2020 property investment sales declined 16.7 per cent on year, noted Colliers in a report on Wednesday.

Commercial assets made up the lion's share of 2020 transactions at 52 per cent. The sector saw 8.8 per cent volume growth to S$18.8 billion, boosted by CapitaLand Mall Trust's acquisition of CapitaLand Commercial Trust's assets upon their merger in the fourth quarter of 2020.

Beyond the merger, Colliers also observed increased institutional acquisition of prime office buildings, attributed to more tech giants setting up bases in Singapore and the URA Incentive Scheme rejuvenation of older precincts.

Meanwhile, residential and industrial investment sales volumes fell 23.6 per cent and 43.3 per cent from 2019 levels respectively on a weak H1 2020 showing and the absence of real estate investment trust transactions.

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Nonetheless, Colliers said it expects private land sales via en bloc and collective sales to recover in 2021. It also sees positive long-term growth in the industrial segment as investors seek warehouses, data centres and hi-specs space to leverage growing e-commerce and technology trends.

The firm is anticipating a strong recovery to pre-pandemic levels in 2021 with its projected 20 per cent growth in overall investment sales to S$29.7 billion. It recommends that investors focus on assets with long-term growth drivers, such as central business district office buildings with income or redevelopment potential, as well as logistics assets and shophouses.

Prime shophouses are sought after as they offer capital preservation and stable rental income, said Colliers.

Assets up for sale in Singapore include a 199-year leasehold conservation shophouse at Boat Quay, as well as several shophouses in Tanjong Pagar, Outram Park, Craig Road, Desker Road and Holland Village, as reported in The Business Times earlier this month.

READ MORE: 

• Conservation shophouses in Tanjong Pagar and Outram Park up for sale
• Singapore shophouse market stays on hot streak with three new sales
• Five Desker Road shophouses up for sale with S$20.3m indicative price
• Freehold Holland Village shophouse up for sale for S$13.5m
• Indonesian tycoon buys 2 Singapore Bukit Pasoh shophouses