Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Knight Frank specifies prime retail locations as rental-yielding units of 350 to 1,500 sq ft with the best front view, connectivity, footfall and ease of access in a shopping center, like ground- or basement-floor retail industry shopping mall units linked to an MRT station or bus interchange.
The common prime retail rentals islandwide expanded by 0.9% q-o-q and 3.8% y-o-y to get to $27.40 psf monthly (psf pm) in 2Q2024, according to a July Knight Frank retail report. The development occurs despite reduced vacationer landings following a temporary boom because of high-profile shows in the very first quarter of the year.
Cuscaden Reserve condo floor plan
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 lower tourist returns. Nevertheless, May saw a rebound to $3.6 billion, generated by food and alcohol spending. Retail action appears to have adjusted to safe ranks in 2Q2024, following the concert-heavy months in 1Q2024, indicates Ethan Hsu, Knight Frank’s head of retail.
Amid this unclear environment, Hsu thinks prime retail rental progression will likely be sluggish for the rest of the year, as increasing prices might potentially discourage development by sellers and urge incorporation instead. Even so, he believes rental fees are still on track to expand between 2% and 4% for the whole year, unchanged from his earlier estimates.
While Taylor Swift and Coldplay concert-goers improved visitors to a spike of nearly 1.5 million in March, traveller arrivings stabilised last quarter, with 1.4 million visitors recorded in April and 1.3 million visitors logged in May and June specifically.
Since 1H2024, prime rents islandwide have actually increased 1.5%, supported by the post-pandemic recovery and new launchings by local and international brands. This includes British shoes merchant Hunter that opened its very first shop in Singapore at Plaza Singapura and French sports apparel brand name Hoka’s beginning in Ion Orchard. The F&B market was joined by starters Ipoh Town, a Malaysian old-fashioned coffeehouse at Jewel Changi International Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
Information from the Bookkeeping and Corporate Regulatory Authority show that retail and F&B service cessations totalled 2,631 in 2Q2024, exceeding the 2,502 services created during the very same duration. This is a reverse from the last quarter when there was a net boost of 295 new retail and F&B ventures.
Whilst the retail industry field in Singapore stays appealing to retailers, Hsu keeps in mind that rising cost of living and a strong Singapore dollar have actually solidified growth as merchants face ascending operating costs.
Prime retail places in the city-fringe viewed the highest possible rental buildup in 2Q2024, rising 1.3% q-o-q to $23.70 psf pm. Prime rents in suburbs ascended 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 place (up 0.6% q-o-q to $30.70 psf pm).
