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Rental declines have slowed down since early 2018 and the large completions seen since 2013 should taper off beginning 2020.
Ground-floor rents on Orchard Road dropped 1.5 percent to $40.60 per sq ft (psf) in the first half of 2019 in contrast to the second half of 2018, reported Singapore Business Review citing Colliers International.
Ground-floor rents of regional centres, on the other hand, held flat at $33.6 psf per month, in line with the Urban Redevelopment Authority’s (URA) reported 1.5 percent rental decline for the central region in H1 2019.
Rental declines have slowed down since early 2018 and the large completions seen since 2013 should taper off beginning 2020. Colliers, however, cautioned that the soft economy could impact consumer sentiment, delaying any rental increases.
Data released by the Department of Statistics revealed that retail sales, excluding motor sales, have declined for four straight months in a year-on-year basis in May.
Moreover, several brands, such as Cold Storage, Isetan and Marks & Spencer, have downsized their operations in H1 2019. Others, such as Crabtree & Evelyn, closed its physical stores in Singapore and moved its operations online, said Colliers.
The real estate company also observed other trends such as “clicks-to-bricks”, where online shops open physical stores; “subscription ecommerce”, where curated products are shipped over to customers regularly; and “experiential retail”, which seek to give unique customer-experience.
Agnes Ong at PropertyGuru, edited this story. To contact her about this or other stories, email agnes.ong@propertyguru.com.sg
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