Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Prime retail places in the city-fringe saw the top leasing buildup in 2Q2024, rising 1.3% q-o-q to $23.70 psf pm. Prime rents in suburban areas climbed up 1.2% q-o-q to $26.50 psf pm, followed by the Marina Centre, City Hall and Bugis part (up 1% q-o-q to $25.50 psf pm) and the Orchard place (up 0.6% q-o-q to $30.70 psf pm).
While Taylor Swift and Coldplay concert-goers boosted visitors to a peak of close to 1.5 million in March, tourist arrivings secured last quarter, with 1.4 million tourists reported in April and 1.3 million guests documented in May and June respectively.
Data from the Accounting and Corporate Regulatory Authority reveal that retail and F&B company cessations completed 2,631 in 2Q2024, surpassing the 2,502 businesses formed throughout the very same duration. This is a reverse from the past quarter when there was a net boost of 295 brand-new retail and F&B enterprises.
Knight Frank defines top retail spaces as rental-yielding units of 350 to 1,500 sq ft with the most ideal frontage, connectivity, footfall and access in a shopping center, such as ground- or basement-floor retail industry shopping mall units linked to an MRT terminal or bus interchange.
Singapore’s total retail sales (omitting motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the reduced foreigner returns. Nonetheless, May observed a rebound to $3.6 billion, generated by food items and alcohol expenditures. Retail activity turns up to have readjusted to maintainable status in 2Q2024, following the concert-heavy months in 1Q2024, mentions Ethan Hsu, Knight Frank’s head of retail.
As of 1H2024, prime rental fees islandwide have increased 1.5%, assisted by the post-pandemic revival and new beginnings by local and international companies. This consists of British shoes store Hunter which started its 1st shop in Singapore at Plaza Singapura and French sports apparel company Hoka’s beginning in Ion Orchard. The F&B sector was joined by startups Ipoh Town, a Malaysian old-fashioned coffee shop at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
In the middle of this uncertain setting, Hsu believes prime retail rental development will likely be weaker for the rest of the year, as rising costs might likely deter growth by stores and compel incorporation instead. Even so, he thinks rental fees are still on the right track to expand in between 2% and 4% for the whole year, unchanged from his earlier forecasts.
The standard prime retail leas islandwide expanded by 0.9% q-o-q and 3.8% y-o-y to reach $27.40 psf monthly (psf pm) in 2Q2024, according to a July Knight Frank retail record. The development happens regardless of lesser traveler landings complying with a short-lived boost because of prominent concerts in the very first quarter of the year.
Whilst the retail store industry in Singapore continues to be attractive to retailers, Hsu notes that rising cost of living and a solid Singapore money have solidified growth as sellers face increasing operating expense.
