Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Prime retail places in the city-fringe saw the highest possible rental buildup in 2Q2024, rising 1.3% q-o-q to $23.70 psf pm. Prime leas in suburbs climbed up 1.2% q-o-q to $26.50 psf pm, followed by the Marina Centre, City Hall and Bugis section (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).
Singapore’s total retail sales (leaving out motor vehicles) dropped from $3.5 billion in March to $3.3 billion in April, in tandem with the lesser visitor arrivals. Still, May saw a pick up to $3.6 billion, driven by food and liquor shopping. Retail activity shows up to have readjusted to sustainable ranks in 2Q2024, following the concert-heavy months in 1Q2024, notes Ethan Hsu, Knight Frank’s head of retail.
Amid this unclear setting, Hsu thinks prime retail rental development will likely be slower for the rest of the year, as rising costs could possibly prevent expansion by merchants and compel incorporation as an alternative. Nonetheless, he thinks rents are still on the right track to expand in between 2% and 4% for the whole year, the same from his earlier forecasts.
Knight Frank specifies prime retail locations as rental-yielding units of 350 to 1,500 sq ft with the greatest frontage, online connectivity, footfall and accessibility in a shopping center, just like ground- or basement-floor retail mall units linked to an MRT terminal or bus interchange.
The common prime retail rentals islandwide grew by 0.9% q-o-q and 3.8% y-o-y to hit $27.40 psf monthly (psf pm) in 2Q2024, according to a July Knight Frank retail report. The development comes despite reduced tourist appearances adhering to a short-term boost as a result of prominent shows in the initial quarter of the year.
While Taylor Swift and Coldplay concert-goers increased visitors to a spike of almost 1.5 million in March, traveller arrivals stabilised last quarter, with 1.4 million visitors reported in April and 1.3 million tourists reported in May and June specifically.
Data from the Accounting and Corporate Regulatory Authority reveal that retail and F&B business cessations completed 2,631 in 2Q2024, going beyond the 2,502 businesses developed throughout the exact same duration. This is a switch from the past quarter when there was a net boost of 295 new retail and F&B enterprises.
While the retail industry market in Singapore stays attractive to retailers, Hsu keeps in mind that inflation and a solid Singapore money have solidified growth as merchants face rising operating costs.
As of 1H2024, prime rents islandwide have actually grown 1.5%, sustained by the post-pandemic regeneration and new launchings by local and international companies. This consists of British shoes retailer Hunter which started its first outlet in Singapore at Plaza Singapura and French sports apparel brand Hoka’s beginning in Ion Orchard. The F&B sector was signed up with by startups Ipoh Town, a Malaysian old-fashioned coffee shop at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.