Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Since 1H2024, prime leas islandwide have increased 1.5%, assisted by the post-pandemic revival and new launchings by local and foreign brand names. This includes British footwear merchant Hunter which opened up its 1st establishment in Singapore at Plaza Singapura and French activewear brand Hoka’s opening in Ion Orchard. The F&B field was signed up with by startups Ipoh Town, a Malaysian traditional coffeehouse at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
Whilst the retail industry in Singapore continues to be attractive to retailers, Hsu keeps in mind that rising cost of living and a strong Singapore dollar have actually tempered development as sellers deal with going up operating costs.
Knight Frank specifies top retail locations as rental-yielding units of 350 to 1,500 sq ft with the best front view, connectivity, footfall and accessibility in a mall, for instance, ground- or basement-floor retail industry shopping center units linked to an MRT station or bus interchange.
Amidst this unclear environment, Hsu believes prime retail rental progress will likely be slow for the rest of the year, as rising prices can potentially deter expansion by sellers and urge consolidation instead. Nonetheless, he believes rental fees are still on the right track to grow between 2% and 4% for the whole year, unmodified from his earlier estimates.
Singapore’s complete retail sales (omitting motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the lower tourist arrivals. Nonetheless, May saw a bounce back to $3.6 billion, steered by food items and alcohol spending. Retail action turns 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.
Data from the Audit and Corporate Regulatory Authority show that retail and F&B service cessations completed 2,631 in 2Q2024, surpassing the 2,502 organizations created during the same period. This is a reverse from the last quarter when there was a net increase of 295 new retail and F&B enterprises.
While Taylor Swift and Coldplay concert-goers improved visitors to a point of nearly 1.5 million in March, tourist arrivals stabilised last quarter, with 1.4 million visitors reported in April and 1.3 million visitors reported in May and June specifically.
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 record. The growth comes despite reduced vacationer arrivals adhering to a brief boom because of top-level performances in the first quarter of the year.
Prime retail places in the city-fringe saw the highest leasing growth in 2Q2024, climbing 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, complied with by the Marina Centre, City Hall and Bugis section (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).
