Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Prime retail spots in the city-fringe observed the highest leasing growth in 2Q2024, increasing 1.3% q-o-q to $23.70 psf pm. Prime leas in suburbs climbed 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).
Amid this unsure atmosphere, Hsu thinks prime retail rental progression will likely be slower for the remainder of the year, as increasing expenses might possibly discourage expansion by stores and urge consolidation as an alternative. Even so, he thinks leas are still on the right track to expand between 2% and 4% for the entire year, the same from his earlier forecasts.
Knight Frank defines top retail spots as rental-yielding units of 350 to 1,500 sq ft with the best front view, connectivity, footfall and availability in a mall, just like ground- or basement-floor retail shopping mall units linked to an MRT terminal or bus interchange.
Singapore’s total retail sales (excluding motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the lower foreigner returns. Nevertheless, May saw a revive to $3.6 billion, steered by food items and booze spending. Retail activity turns up to have actually adjusted to maintainable ranks in 2Q2024, mirroring the concert-heavy months in 1Q2024, indicates Ethan Hsu, Knight Frank’s head of retail.
While Taylor Swift and Coldplay concert-goers boosted site visitors to a point of close to 1.5 million in March, tourist arrivals secured last quarter, with 1.4 million visitors documented in April and 1.3 million guests recorded in May and June respectively.
The standard prime retail rents islandwide grew by 0.9% q-o-q and 3.8% y-o-y to reach $27.40 psf per month (psf pm) in 2Q2024, according to a July Knight Frank retail record. The progress occurs in spite of lower traveler appearances following a brief boost because of top-level concerts in the first quarter of the year.
Information from the Accountancy and Corporate Regulatory Authority show that retail and F&B company cessations totalled 2,631 in 2Q2024, exceeding the 2,502 services created throughout the exact same duration. This is a turn around from the last quarter when there was a net increase of 295 new retail and F&B business.
Whilst the retail store field in Singapore remains appealing to retailers, Hsu notes that inflation and a strong Singapore dollar have solidified development as retailers deal with going up operating expense.
As of 1H2024, prime leas islandwide have actually expanded 1.5%, sustained by the post-pandemic regeneration and new openings by local and international companies. This consists of British footwear store Hunter that launched its 1st shop in Singapore at Plaza Singapura and French sportswear brand Hoka’s opening in Ion Orchard. The F&B market 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.
