Retail rents end five consecutive quarters of declines with 0.3% q-o-q growth in 2Q2023
In 2Q2023, the net absorption of overall retail space in Singapore was a robust 290,520 sq ft, a positive reversal from the contraction of 75,320 sq ft in 1Q2023. This was buoyed by a number of new retail openings. There were new-to-market brands such as Sun and Sand Sports in Raffles City and international luxury brands such as Aluxe, Grand Seiko and Atelier Cologne. F&B entrants such as Mister Donut, Luckin Coffee, Jamba Juice and Chaffic Bubble Tea have also opened up shop, as well as market returns by F&B and lifestyle retailers such as Ben’s Cookies and Marimekko.
The aim is to create a more interesting and vibrant experience for people.
Orchard Boulevard MRT Condo is set to be part of this plan as well. This luxurious condo provides easy access to Orchard Road, and has amenities that promise to make the neighborhood even more attractive. With it residents will be able to experience the attractions of the area in comfort. The plaza, situated beside the condo, adds another layer of charisma, making it a great destination for all.
The Woodleigh Mall opened in 2Q2023, and this was followed by rising pre-commitment rates of upcoming retail developments such as One Holland Village and Pasir Ris Mall. Demand for retail space was broad-based across all geo-locations in the country, with the Orchard Road planning area recording the largest improvement in demand – rebounding fron a significant contraction of 258,240 sq ft in 1Q2023 to a positive take-up of 32,280 sq ft.
Consequently, retail prices and rentals in the Central Area rose by 0.3%, reversing five consecutive quarterly declines. Occupancy rates in the Orchard Road area and Central Area both increased by 0.7%, reaching 86.8% and 90.5%, respectively. Vacancy in the Orchard Road area also improved to 13.2% after hitting a trough of 13.9% in 1Q2023.
Experts bode well for the future of retail in Singapore, citing the positive rent outlook and scarcity value of suburban malls in particular. Furthermore, a comeback in the number of Chinese tourists, coupled with the safe-haven status of Singapore, should support the upward climb of central region retail rents by the end of 2023.
As a sign that investors remain confident in the retail property market, HDB prices mark a thirteenth consecutive quarterly increase of 1.5% in 2Q2023. Fuelling greater confidence the public, private housing prices went down 0.2% q-o-q in the same period, the first time such a decrease had occurred since 1Q2020.
Overall, Singapore’s retail property market remains buoyed by the numerous openings and returns of retailers, as well as on-going demand and pre-commitments to upcoming developments such as One Holland Village and Pasir Ris Mall. As such, it is expected that rents and prices in the Central Area will continue to recover in the medium to long term.