The United Nations projects that 86% of population in developed countries will be living in cities by 2050. As an increasing number of people will reside in urban areas of cities in the long run, rising demand traffic flow will likely drive up the value of prime street shops in the long-run.
Each shop property is unique, high-quality tenants tend to stay instead of moving once their businesses started operating. They can bring stable rental returns compared to the overall residential market where appreciation largely depends on overall market trend. Furthermore, value of shops may surge exponentially if there is major redevelopment project in the vicinity.
Physical shops allow real-time transactions, return of goods, and better customer service. Compared to malls, street shops are not accessible by pedestrians, they can generally remain open for longer hours in the day with less or no restriction on the goods sold. This flexibility in operation is what distinguishes street shops and makes them irreplaceable.
“One Shop can Raise Three Generations" is a deep-rooted concept in Chinese culture. However, there are no similar sayings with respect to residential properties, car parks, or businesses. “Brick and Mortar” investing in physical shop properties tends to be one of the major options for wealth succession.
When purchasing a residential property, the age of the building is often a key concern. However, this is the case for shop property. Unlike residential properties where value depreciates with age and potential costs for maintenance rise, multiple-fold appreciation and beyond are often seen in aging shop properties.
One of the key attributes of street shops is their “advertising impact.” Physical shops can help instill customer confidence and promotes brand recognition. This explains why many business operators / retailers continue to rent prominent street shops regardless of whether certain shops are profitable on their own right
Big street shops are usually located in public spaces which are easily accessible by pedestrians. Owners can enjoy a great sense of pride in owning a part of the property, especially if the owner also operates a business in the premise and can play host to their friends and families.