Bookmark & Share
Singapore saw mixed rental performances across the island in Q2 2016, with Marina Centre, City Hall and Bugis precinct registering a 0.4 percent drop in prime rents to S$31.40 per sq ft per month, revealed a Knight Frank report.
Prime rents in city Fringe and suburban areas rose 0.1 percent and 0.3 percent to S$24.70 and S$29.50 per sq ft per month respectively, with the injection of new prime space and revamped shopping malls.
Orchard Road prime rents, on the other hand, held firm at S$35.20 per sq ft per month on the back of continued demand and the limited supply of prime spaces.
Knight Frank executive director and retail head Wendy Low noted that some malls are including large format lifestyle and wellness service providers as anchor tenants, to offer their shoppers an added experiential retail experience.
Spanning more than 10,000 sq ft of space each, these large format wellness operators offer holistic retail experience to shoppers with their suite of spa and wellness services and healthy dining options. Examples are emerging anchor tenants, like Yunomori Japanese Onsen & Spa and Calla Spa which opened in Kallang Wave Mall and Suntec City respectively.
Mall owners are also looking towards local retailers to add refreshing retail options to their existing trade mix, said the report.
Kinetic Singapore’s multi-concept shop K+, for instance, opened its doors in Scott Square in July 2016 featuring six local brands as their main collaborators.
Over the past few years, home-grown online brands such as MDS, Naiise and Love Bonito have successfully established their presence in local shopping malls.
Faced with the market pressure to refresh retail mix, Knight Frank said landlords can take advantage of the situation to introduce a new retail concept.
“Rents of these retail units may, however, be compromised in the short-term, while these concepts and brands are being incubated.”
Notably, Knight Frank expect average rents in the central region to fall by 5.0 percent year-on-year by Q4 2016, while prime rents may moderate by up to 2.0 percent year-on-year.
“With an estimated upcoming supply of 1.7 million sq ft of retail net lettable area by end-2016, island-wide occupancy rate could decline from 92.8 percent in Q4 2015, to between 90.0 percent and 92.0 percent in Q4 2016,” it added.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
Related Articles:
Compass One to reopen in September