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Singapore has the second most number of new entrants of cafes and restaurants in Asia Pacific last year, making up 23 of the 63 new entrants in the region, a CBRE report released on Tuesday (19 April) revealed.
New entrants are defined by CBRE as cross-border retailers which opened their fist standalone store for trading during the year.
According to CBRE, “strong consumer demand for ‘retail-tainment’ continued to support the growth in the number of new F&B entries across Asia Pacific.
In Singapore, the proportion of F&B businesses in retail malls has increased “from an average of 25 percent to 30 percent,” said Letty Lee, director for Retail Services at CBRE said.
“There is no denying that for every F&B operator that signs a lease, there are a few who exit. But what is important is that Singapore continues to attract a steady stream of F&B operators in keeping with the city’s discerning palate,” Lee added.
Meanwhile, despite market headwinds, CBRE said international retailers find opportunities here as rents decline.
In Q1 2016, rents for Singapore’s prime Orchard Road and the suburbs declined, albeit at a more controlled pace due to limited prime space. Meanwhile, prime Orchard Road rents fell 0.6 percent from last quarter to S$42.85 per sq ft per month in the first quarter of 2016, while prime surburban rents inched downwards by 0.8 percent to S$29.65.
Desmond Sim, Head, CBRE Research, Singapore & South East Asia said “The tough leasing climate has prompted some landlords to further adjust rental expectations, especially in areas where competition is stiff and foot traffic relatively poor. To save costs, more established retailers have opted to relocate out of prime corridors to secondary corridors, especially in the Orchard Road sub-market.”
Sim added that this also encouraged by landlords as part of their tenant re-positioning exercise. “Freeing up prime space has allowed landlords to pursue retailers seeking flagship space. Brands, including F&B retailers are still looking to introduce experiential or ‘retail-tainment’ concepts and are seeking larger floor plates.”
Nikki Diane De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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