Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
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 report. The growth occurs despite reduced vacationer appearances following a temporary boom as a result of high-profile performances in the initial quarter of the year.
While Taylor Swift and Coldplay concert-goers enhanced visitors to a peak of close to 1.5 million in March, traveller arrivings secured last quarter, with 1.4 million visitors recorded in April and 1.3 million guests reported in May and June specifically.
Prime retail spaces in the city-fringe observed the top rentals buildup in 2Q2024, climbing 1.3% q-o-q to $23.70 psf pm. Prime leas in suburban areas ascended 1.2% q-o-q to $26.50 psf pm, followed by the Marina Centre, City Hall and Bugis place (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).
Whilst the retail store industry in Singapore stays appealing to retailers, Hsu keeps in mind that inflation and a strong Singapore dollar have actually tempered growth as sellers face going up operating costs.
Singapore’s overall retail sales (excluding motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the lower foreigner arrivals. Nevertheless, May observed a bounce back to $3.6 billion, driven by food items and booze shopping. Retail activity shows up to have altered to sustainable levels in 2Q2024, mirroring the concert-heavy months in 1Q2024, mentions Ethan Hsu, Knight Frank’s head of retail.
Since 1H2024, prime rents islandwide have increased 1.5%, assisted by the post-pandemic revival and new beginnings by local and international companies. This consists of British shoes retailer Hunter which began its 1st store in Singapore at Plaza Singapura and French sports apparel company Hoka’s introduction in Ion Orchard. The F&B industry was joined by newcomers Ipoh Town, a Malaysian old-fashioned coffeehouse at Jewel Changi International Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.
Blossoms By The Park floor plan
In the middle of this unsure setting, Hsu thinks prime retail rental progress will likely be sluggish for the rest of the year, as climbing expenses might likely hinder growth by retailers and oblige incorporation instead. Nevertheless, he thinks rental fees are still on the right track to expand between 2% and 4% for the entire year, unchanged from his earlier forecasts.
Data from the Accounting and Corporate Regulatory Authority reveal that retail and F&B business cessations amounted to 2,631 in 2Q2024, surpassing the 2,502 services developed throughout the same duration. This is a turn around from the previous quarter when there was a net boost of 295 new retail and F&B ventures.
Knight Frank defines prime retail places as rental-yielding units of 350 to 1,500 sq ft with the best front view, connectivity, footfall and availability in a shopping mall, just like ground- or basement-floor retail industry mall units linked to an MRT terminal or bus interchange.
