Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Information from the Bookkeeping and Corporate Regulatory Authority show that retail and F&B company cessations totalled 2,631 in 2Q2024, going beyond the 2,502 services formed throughout the exact same period. This is a reverse from the last quarter when there was a net rise of 295 brand-new retail and F&B enterprises.
Prime retail spaces in the city-fringe observed the highest leasing improvement in 2Q2024, increasing 1.3% q-o-q to $23.70 psf pm. Prime rental fees in suburbs climbed up 1.2% q-o-q to $26.50 psf pm, adhered to 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).
As of 1H2024, prime leas islandwide have grown 1.5%, sustained by the post-pandemic recovery and new openings by local and foreign labels. This includes British footwear seller Hunter which opened its very first establishment in Singapore at Plaza Singapura and French activewear company Hoka’s opening in Ion Orchard. The F&B industry was joined by startups Ipoh Town, a Malaysian classic coffee bar at Jewel Changi International Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
Amidst this unsure setting, Hsu thinks prime retail rental growth will likely be slower for the rest of the year, as climbing expenses might potentially prevent development by merchants and force incorporation instead. Nevertheless, he thinks rental fees are still on the right track to grow in between 2% and 4% for the whole year, unmodified from his earlier estimates.
Singapore’s total retail sales (omitting motor vehicles) dropped from $3.5 billion in March to $3.3 billion in April, in tandem with the lesser visitor returns. Nonetheless, May saw a pick up to $3.6 billion, generated by food and booze expenditures. Retail action appears to have readjusted to maintainable ranks in 2Q2024, mirroring the concert-heavy months in 1Q2024, mentions Ethan Hsu, Knight Frank’s head of retail.
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While Taylor Swift and Coldplay concert-goers increased visitors to a point of nearly 1.5 million in March, visitor arrivings secured last quarter, with 1.4 million guests recorded in April and 1.3 million tourists logged in May and June respectively.
Knight Frank specifies prime retail spots as rental-yielding units of 350 to 1,500 sq ft with the best front view, online connectivity, footfall and accessibility in a shopping mall, such as ground- or basement-floor retail industry shopping mall units linked to an MRT station or bus interchange.
The average prime retail rents islandwide grew 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 record. The progress comes despite reduced traveler arrivals following a temporary boost because of prominent concerts in the very first quarter of the year.
While the retail industry in Singapore remains appealing to retailers, Hsu keeps in mind that rising cost of living and a solid Singapore money have actually solidified development as stores face increasing operating expense.
