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Retail rents in Singapore are showing signs of stabilisation, with gross rents of first storey retail space in Orchard / Scotts Road remaining stable at $37.20 psf per month in the first quarter of 2017, revealed a report from Edmund Tie & Co.
This was in contrast to the one percent drop in monthly rent registered within the area over the same period last year.
Other city areas including City Hall, Raffles Place, Shenton Way, Bugis and Tanjong Pagar saw the drop in first storey retail rents moderate to 0.6 percent quarter-on-quarter in Q1 2017 from one percent quarter-on-quarter in Q4 2016.
Rents for first storey retail space at suburban malls held firm at $30.60 psf per month quarter-on-quarter.
The report attributed the stabilisation of rents to stronger retail sales and higher visitor arrivals in 2016.
The Singapore Tourism Board’s preliminary estimates in February showed that tourism receipts increased 13.9 percent to $24.8 billion, while tourist arrivals rose 7.7 percent to 16.4 million.
“Retail occupancy across the island also improved towards the end of 2016, reaching 91.5 percent in Q4 2016 from 90.6 percent in Q3 2016.”
Looking ahead, the property consultancy expects retail rents to remain under pressure from the external environment and continued growth of e-commerce.
“E-commerce is an enabler that allows the products of local retailers to reach a wider audience, without paying the high rents at prime shopping malls. It also lowers the costs of failure, and allows for greater flexibility as it does not require sales personnel or a physical place to exhibit their goods,” said Dr Lee Nai Jia, Head of Southeast Asia Research at Edmund Tie & Co.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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