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Tight labour and high operation costs in Singapore continues to take a hit on the retail market here as some consolidations among big players within the F&B segment were seen in the previous quarter, revealed a Cushman& Wakefield report.
Examples of which include that by 1 Market by Chef Wan under the Food Junction Management and Toast Box under the BreadtalkGroup.
However, despite the ongoing consolidation trend, the report noted that demand for retail spaces here remain relatively high especially for projects nearing completion.
Retail space at Compass One, for instance, is 90.0 percent pre-leased, ahead of its opening in Q3 2016, while Marina One is 50.0 percent pre-committed, with tenants including Cold Storage, Cookhouse by Koufu and Virgin Active.
Shopping malls and department stores have increased their F&B components in order to combat the surge of e-commerce, considering that experience-based concepts are irreplaceable by online retail.
Notably, a cluster of 16 restaurants will be opening in WismaAtria’s Japan Food Town, while MujiCafé and Meal will open its second outlet in Raffles City. Robinsons the Heeren also welcomed Angela May Food Chapters recently.
Orchard Road saw average prime rents drop by 0.8 percent quarter-on-quarter in Q2 2016, as demand from international brands for shop-fronting prime space remained relatively steady.
Average prime rents in the city fringe areas dip by 0.4 percent quarter-on-quarter, while that in suburban areas fell by 0.1 percent quarter-on-quarter.
Looking ahead, Cushman & Wakefield expects prime space rentals in the city fringe areas to be boosted by the completion of alteration and addition (A&A) works from major developments within the City Hall/Marina Bay cluster.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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