Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
The common prime retail leas islandwide expanded by 0.9% q-o-q and 3.8% y-o-y to get to $27.40 psf per month (psf pm) in 2Q2024, according to a July Knight Frank retail report. The progress occurs despite reduced vacationer appearances complying with a temporary boost because of high-profile concerts in the initial quarter of the year.
While the retail field in Singapore stays attractive to retailers, Hsu keeps in mind that rising cost of living and a solid Singapore dollar have tempered development as merchants deal with going up operating expense.
Knight Frank defines top retail spaces as rental-yielding units of 350 to 1,500 sq ft with the greatest frontage, connectivity, footfall and accessibility in a shopping mall, like ground- or basement-floor retail industry mall units linked to an MRT station or bus interchange.
While Taylor Swift and Coldplay concert-goers enhanced site visitors to a spike of almost 1.5 million in March, traveller arrivals secured last quarter, with 1.4 million tourists reported in April and 1.3 million visitors logged in May and June respectively.
Singapore’s total retail sales (leaving out motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the lower visitor arrivals. Nevertheless, May observed a bounce back to $3.6 billion, steered by food items and liquor spending. Retail action turns up to have actually altered to maintainable levels in 2Q2024, following the concert-heavy months in 1Q2024, indicates Ethan Hsu, Knight Frank’s head of retail.
Prime retail places in the city-fringe viewed the highest possible rental improvement in 2Q2024, rising 1.3% q-o-q to $23.70 psf pm. Prime rents in suburbs climbed 1.2% q-o-q to $26.50 psf pm, adhered to by the Marina Centre, City Hall and Bugis part (up 1% q-o-q to $25.50 psf pm) and the Orchard part (up 0.6% q-o-q to $30.70 psf pm).
Amid this unsure atmosphere, Hsu believes prime retail rental growth will likely be slow for the rest of the year, as rising expenses could potentially discourage growth by sellers and oblige incorporation instead. Nevertheless, he thinks rents are still on track to grow between 2% and 4% for the whole year, unmodified from his earlier projections.
Data from the Accounting and Corporate Regulatory Authority reveal that retail and F&B service cessations totalled 2,631 in 2Q2024, surpassing the 2,502 companies created throughout the very same period. This is a reverse from the previous quarter when there was a net boost of 295 new retail and F&B business.
Since 1H2024, prime rents islandwide have increased 1.5%, supported by the post-pandemic revival and new launchings by local and foreign brands. This includes British shoes retailer Hunter that opened up its 1st shop in Singapore at Plaza Singapura and French sports wear company Hoka’s introduction in Ion Orchard. The F&B sector was signed up with by startups Ipoh Town, a Malaysian classic cafe at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.