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Singapore’s soft job market and weaker-than-expected economic growth may affect spending for the rest of the year, according to a Cushman & Wakefield report.
Notably, retail sales within the city-state remained in the doldrums, dropping by 3.2 percent and 2.3 percent year-on-year in June and July 2016 respectively, even as tourism arrivals rose by 7.2 percent and 6.7 percent year-on-year in June and July.
Mastercard Index of Consumer Confidence for 1H 2016 showed that consumer confidence in Singapore plunged to its lowest level since June 2009.
Big ticket items, such as watches and jewellery, telecomm, apparatus and computer segments, posted a significant drop in sales as consumers turned more cautious on their spending.
In fact, even the F&B segment was not spared as it saw retail sales fall by 7.4 percent year-on-year in July 2016.
In terms of property prices, average prime rents in Orchard Road declined by 1.2 percent quarter-on-quarter, while average prime rents in suburban areas declined by 0.5 percent quarter-on-quarter on the back of recent take-ups at newly completed projects such as Compass One and Waterway Point was relatively strong, said Cushman & Wakefield.
It warned that vacancies in retail malls may “worsen with the ongoing retail business consolidations arising from higher operating costs and competitions from e-commerce.”he report noted that landlords have taken a more proactive approach by promoting lifestyle retail.
The report noted that landlords have taken a more proactive approach by promoting lifestyle retail to draw the crowd.
Cathay Cineleisure Orchard, for instance, introduced a 24,000 sq ft indoor trampoline park, while the new Funan mall, which is set to be completed by end-2019, will feature an indoor cycling path and a rock climbing facility among other sports facilities.
The upcoming OUE Downtown, slated for completion early next year, on the other hand, “will bring in a 4,000 sq ft social kitchen and an auto deli area where lockers and a casual dining area are available for use to enhance customer’s experience.”
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg