Bookmark & Share
Leasing activities for prime retail spaces remained largely subdued in Q3 2014 due to the limited availability of such premises and high pre-commitment rates at major upcoming shopping centres – One KM and Seletar Mall, according to a Knight Frank report.
As a result, average island-wide rents for prime retail spaces were virtually unchanged compared to the previous quarter.
On an annual basis, island-wide gross rents of prime retail spaces rose by 0.9 percent to S$32 per sq ft per month in Q3 2014. In particular, monthly rents in City Fringe areas edged up 0.6 percent to S$23 per sq ft, while those in Suburban locations grew by 0.7 percent to S$32.20.
Prime retail spaces in Marina Centre, City Hall and Bugis recorded the biggest year-on-year growth, with monthly rents rising by 3.2 percent to $32.60 per sq ft, mainly due to the Asset Enhancement Initiatives (AEI) in Suntec City and Marina Square, said the consultancy.
Over at Orchard road, monthly rents of retail spaces located in fringe areas remained the same at S$24.10 per sq ft, while those in central locations posted an uptick of 0.2 percent to $47.90 per sq ft.
Looking ahead, rents of prime retail space across Singapore are forecasted to remain resilient with a potential annual growth of up to one percent in 2014, while next year could see a higher growth of between two and three percent, given that such premises are still in-demand for retailers despite high operating costs and stringent rules on hiring foreign workers, it noted.
In terms of supply, about 4.6 million sq ft of net lettable retail space are expected to enter the market between 2014 and 2018, averaging around 927,000 sq ft per year. This is 4.9 percent higher than the average annual new supply for the three-year period up to Q2 2014.
Approximately 2.7 million sq ft of the retail space or 58.4 percent of overall incoming supply are located in the Outside Central Region (OCR). But by 2018, 79.3 percent of the total annual supply will come from that area.
“This sizeable supply is mainly attributable to two key projects, Project Jewel at Airport Boulevard and Northpoint City at Yishun. Other upcoming suburban retail spaces over the next four years include Big Box, The Seletar Mall, Eastpoint Mall, Hillion Mall, Waterway Point, and Changi Airport Terminal 4,” Knight Frank added.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
Related Articles:
New appointments for KOP’s hotel management arm