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. Good tenants tend to stay instead of moving from one shop to another. 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 have significant upside if there is a good tenant providing strong rental yield or 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 only 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 not 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