Singapore’s retail market registers second consecutive growth year as rents increase 0.5% y-o-y in 2024

Rental growth in Singapore’s retail property market listed an annual raise of 0.5% for the entire of 2024, according to realty statistics published by URA on Jan 24. This marks the 2nd constant year that the local retail market has found rents grow, after raising 0.4% y-o-y in 2023.

Angelia Phua, consulting director of research and consultancy, Singapore, at JLL, claims that the latest leasing and cost data show that the recuperation in the more comprehensive retail real property market is mainly on track regardless of continuous economic obstacles such as intake leakage, the dampening effects of rate inflation on consumption and cost stress faced by retail drivers.

On the other hand, Leonard Tay, head of research at Knight Frank Singapore, believes that the fairly strong Singapore dollar and inflationary cost stress could stimulate many locals to reroute their retail investing overseas. “Prime retail rental growth for 2025 is anticipated to reduce and secure within a predicted range of in between 1% and 3%,” he states.

The descending fad in the island wide retail vacancy rate, which dropped for the third consecutive quarter, underpinned resistant occupant interest in the middle of a moderate supply of retail area this year, claims Phua.

The most up to date information shows that retail rentals increased 0.6% q-o-q in 4Q2024, building on the quarterly increase of 0.3% captured in 3Q2024.

“Rent development possibility, however, could be regulated by usage leak arising from outbound travel and the strength of the Singapore dollar, along with sellers’ level of sensitivity to rent hikes among a difficult and uncertain operating environment,” claims Phua. Based on JLL Research’s retail asset portfolio, she expects rental fees for prime flooring space of investment-grade retail assets to proceed growing by 1.5 to 2.5% y-o-y in 2025.

Additionally, the island-wide openings rate in the retail property market slid 0.3% q-o-q to 6.2% in 4Q2024. This was mainly steered by declines in the vacancy rates in the Central Area (dropping 0.4% q-o-q to 7.2%) and Outside Central Region (slipping 0.3% q-o-q to 4.3%) last quarter.

Wong notes that openings rates in the OCR increased somewhat to 4.3% in 4Q2024, ascend from 4.2% in 4Q2023 yet still below the pre-pandemic 6.2% in 4Q2019, that shows a tough suburban retail market. He includes: “Boosted connectivity and diverse retail offerings, including lifestyle and eating alternatives, have improved suburban allure, attracting respected abroad F&B brands. Japan’s Warabimochi Kamakura and Hong Kong’s Ging Sun Ho King of Bun have actually debuted at One Holland Village and Tampines Mall, respectively.”

Meanwhile, retail prices dipped 1.3% q-o-q in 4Q2024, nearly getting rid of the quarterly rise of 1.7% that was documented in 3Q2024. Nonetheless, retail prices finished 2024 with an increase of 1.0% y-o-y compared to the 1.2% y-o-y surge marked in 2023.

Net retail interest in the Outside Central Region reached 560,000 sq ft in 2024, over four times the 129,000 sq ft in 2023, while net supply completed 603,000 sq ft.

Blossoms By The Park condo

” Stores continue to integrate experiential components right into their bricks-and-mortar stores, to boost the buying experience and drive client activity. Zara and Levi’s resumed at ION Orchard in 2024, with Zara releasing express in-store pick-up and Levi’s unveiled its initial Tailor Outlet,” says Wong Xian Yang, head of research Singapore & SEA at Cushman & Wakefield.

Looking ahead, the island-wide retail vacancy level is anticipated to stay tight this year, which must support rental growth for prime retail places, states Phua. She adds that the marketplace will be buoyed by sustained domestic consumption, a tighter labour market, and a favorable tourism outlook in 2025.

She adds that brand-new need for retail room was spearheaded by the access of new-to-market labels and the expansion of existing companies such as F&B, active lifestyle and sports, fashion companies, as well as beauty and wellness labels.

Not just prime retail areas in the Central Area have seen an uptick in necessity. Net retail interest in the Outside Main Area (OCR) was 560,000 sq ft last year, around 4 times the 129,000 sq ft taken up in 2023.

As an example, French sports brand name Salomon opened avenues at Ngee Ann City and Orchard Central, while Finnish lifestyle company Marimekko opened its second outlet at Ngee Ann City after its 2023 released at ION Orchard.


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