According to Knight Frank’s Wealth Report 2021, the number of Ultra High Net Worth Individuals—with a net worth of US$30 million inclusive of their primary residence—in 2020 went up by 10.2 per cent from 2019 despite the pandemic-led recession. “Besides other luxury properties in Singapore, shophouses also provide a draw for such investors looking into niche commercial space with cultural character,” says Sai. 
 
The number is steadily rising, notes Clive Chng, associate director of Red Brick Mortgage Advisory. In 2020 amidst the pandemic, 135 shophouses were sold, which was a 10 per cent increase from the 123 shophouses that were sold in 2019.

“Shophouses have already captured the imagination of foreign investors with its rarity and hence heritage value, which provides a capital preservation element to the investment,” says Fang Low, CEO and co-founder of Figment, which focuses on reviving these charming icons of the old world as co-living spaces.

Besides, there are only 6,500 shophouses in total around Singapore, and they are gazetted as conservation buildings. For many Singaporeans like Low, the investments are more of an emotional nature—“there are elements of cultural value and historical significance that a financial term sheet could never capture”, he says.  

See also: Why Figment CEO Fang Low is Betting Big on Singapore's Shophouses

That said, their scarcity also means that they hold their value well, amidst a recessionary environment, says Chng. “Buyers may be drawn to shophouses for their heritage value, location or distinct architecture, but many investors also view moving into a shophouse as a defensive play. The increase in Additional Buyer Stamp Duty since July 2018 has also made commercial properties and shophouses more lucrative investment options.”

“Purchasers see shophouses as an opportunity to hedge against the volatility in the equity market and other asset classes. So amid the limited supply, and high liquidity and low-interest rate environments, they will continue to be the preferred asset class for mid-to-long term investments,” says Yee.    

See also: Living With The Covid-19 Pandemic: 7 Property Trends To Watch For 2021

Another noticeable trend in the “new normal” has been the shift in demand from the prime districts of D1 and D2 towards city fringe areas as more companies adopt to work from home arrangements.  
 
“Vacancies in shophouses have been filled up since the resumption of business activities and roll-out of vaccinations in Singapore,” says Sai. “As such, many shophouse owners have been optimistic in their asking prices for sales and rentals since the beginning of the year. This trend is likely to continue causing an upsurge in transaction values and volume.”  

“Relatively speaking, more investment flowing into the shophouse space is always a good thing because it reduces the dense urban sprawl of Gross Floor Area (GFA)-maximised, cookie-cutter condominiums we see cluttering our Singapore skyline today,” says Low. “This trend is a strong tailwind for Urban Redevelopment Authority’s conservation efforts. We see investment funds today put to work in restoring these shophouses, even further out in the city fringe, to their former splendour. Like Georgetown in Penang, maybe we might even see Singapore shophouses being added to the list of UNESCO world heritage sites in the near future.”