Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Prime retail spaces in the city-fringe viewed the highest rental buildup in 2Q2024, climbing 1.3% q-o-q to $23.70 psf pm. Prime leas in suburban areas climbed up 1.2% q-o-q to $26.50 psf pm, followed by the Marina Centre, City Hall and Bugis area (up 1% q-o-q to $25.50 psf pm) and the Orchard area (up 0.6% q-o-q to $30.70 psf pm).
While Taylor Swift and Coldplay concert-goers increased visitors to a point of close to 1.5 million in March, tourist arrivings secured last quarter, with 1.4 million visitors documented in April and 1.3 million tourists reported in May and June respectively.
While the retail store field in Singapore continues to be attractive to retailers, Hsu notes that rising cost of living and a strong Singapore dollar have actually tempered development as merchants deal with going up operating costs.
Information from the Accountancy and Corporate Regulatory Authority reveal that retail and F&B company cessations amounted to 2,631 in 2Q2024, surpassing the 2,502 businesses formed throughout the very same duration. This is a turn around from the past quarter when there was a net increase of 295 brand-new retail and F&B business.
Singapore’s complete retail sales (leaving out motor vehicles) dropped from $3.5 billion in March to $3.3 billion in April, in tandem with the lower visitor arrivals. Still, May saw a pick up to $3.6 billion, steered by food items and alcohol spending. Retail action seems to have actually adjusted to maintainable ranks in 2Q2024, mirroring the concert-heavy months in 1Q2024, notes Ethan Hsu, Knight Frank’s head of retail.
The standard prime retail leas islandwide grew by 0.9% q-o-q and 3.8% y-o-y to hit $27.40 psf each month (psf pm) in 2Q2024, according to a July Knight Frank retail record. The growth occurs regardless of lesser vacationer landings following a brief boost due to high-profile shows in the very first quarter of the year.
In the middle of this unclear atmosphere, Hsu believes prime retail rental progress will likely be slow for the rest of the year, as climbing prices can potentially hinder development by sellers and compel incorporation instead. Even so, he believes leas are still on the right track to grow in between 2% and 4% for the entire year, the same from his earlier projections.
Since 1H2024, prime rental fees islandwide have increased 1.5%, assisted by the post-pandemic regeneration and new launchings by local and international brands. This consists of British shoes seller Hunter which launched its very first establishment in Singapore at Plaza Singapura and French sportswear company Hoka’s introduction in Ion Orchard. The F&B sector was joined by beginners Ipoh Town, a Malaysian classic coffee bar at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.
Knight Frank specifies top retail places as rental-yielding units of 350 to 1,500 sq ft with the most ideal frontage, online connectivity, footfall and availability in a shopping center, for instance, ground- or basement-floor retail shopping mall units linked to an MRT terminal or bus interchange.