Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Singapore’s total retail sales (omitting motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the reduced foreigner returns. Still, May observed a rebound to $3.6 billion, steered by food and alcohol expenditures. Retail activity turns up to have actually altered to sustainable levels in 2Q2024, following the concert-heavy months in 1Q2024, indicates Ethan Hsu, Knight Frank’s head of retail.
The common prime retail leas 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 progress comes despite lesser vacationer arrivals adhering to a temporary boom as a result of top-level performances in the initial quarter of the year.
Prime retail places in the city-fringe saw the top rental growth in 2Q2024, increasing 1.3% q-o-q to $23.70 psf pm. Prime leas in suburban areas ascended 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).
Since 1H2024, prime leas islandwide have actually expanded 1.5%, sustained by the post-pandemic recovery and new launchings by local and international brands. This includes British footwear merchant Hunter that launched its 1st store in Singapore at Plaza Singapura and French sportswear brand Hoka’s beginning in Ion Orchard. The F&B market was joined by newcomers Ipoh Town, a Malaysian old-fashioned coffeehouse at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.
While Taylor Swift and Coldplay concert-goers increased visitors to a peak of close to 1.5 million in March, visitor arrivings stabilised last quarter, with 1.4 million visitors documented in April and 1.3 million visitors logged in May and June specifically.
Data from the Accounting and Corporate Regulatory Authority show that retail and F&B service cessations amounted to 2,631 in 2Q2024, exceeding the 2,502 services developed throughout the exact same duration. This is a reverse from the previous quarter when there was a net increase of 295 new retail and F&B business.
Knight Frank specifies prime retail spots as rental-yielding units of 350 to 1,500 sq ft with the greatest front view, online connectivity, footfall and availability in a shopping center, like ground- or basement-floor retail industry mall units linked to an MRT terminal or bus interchange.
While the retail store sector in Singapore continues to be appealing to retailers, Hsu notes that rising cost of living and a good Singapore money have actually solidified growth as retailers face going up operating expense.
Amid this unclear environment, Hsu believes prime retail rental development will likely be weaker for the rest of the year, as rising costs might likely hinder growth by stores and compel incorporation instead. Nonetheless, he believes rental fees are still on course to grow in between 2% and 4% for the whole year, unchanged from his earlier forecasts.
