Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Information from the Audit and Corporate Regulatory Authority show that retail and F&B business cessations totalled 2,631 in 2Q2024, surpassing the 2,502 organizations formed throughout the very same duration. This is a switch from the previous quarter when there was a net increase of 295 new retail and F&B enterprises.
Knight Frank defines prime retail spots as rental-yielding units of 350 to 1,500 sq ft with the most ideal front view, connectivity, footfall and ease of access in a mall, like ground- or basement-floor retail industry mall units connected to an MRT terminal or bus interchange.
While Taylor Swift and Coldplay concert-goers increased visitors to a peak of almost 1.5 million in March, tourist arrivings secured last quarter, with 1.4 million visitors documented in April and 1.3 million tourists reported in May and June specifically.
Prime retail sectors in the city-fringe observed the top rental improvement in 2Q2024, climbing 1.3% q-o-q to $23.70 psf pm. Prime rents in suburbs climbed up 1.2% q-o-q to $26.50 psf pm, adhered to by the Marina Centre, City Hall and Bugis part (up 1% q-o-q to $25.50 psf pm) and the Orchard place (up 0.6% q-o-q to $30.70 psf pm).
Singapore’s complete retail sales (excluding motor vehicles) dropped from $3.5 billion in March to $3.3 billion in April, in tandem with the lesser tourist returns. Nonetheless, May saw a rebound to $3.6 billion, generated by food and liquor shopping. Retail action appears to have altered to maintainable levels in 2Q2024, mirroring the concert-heavy months in 1Q2024, indicates Ethan Hsu, Knight Frank’s head of retail.
In the middle of this unclear environment, Hsu thinks prime retail rental growth will likely be slow for the rest of the year, as increasing expenses can possibly hinder growth by sellers and force consolidation instead. Nonetheless, he believes rental fees are still on the right track to expand between 2% and 4% for the whole year, unchanged from his earlier estimates.
The standard prime retail rentals islandwide grew by 0.9% q-o-q and 3.8% y-o-y to hit $27.40 psf per month (psf pm) in 2Q2024, according to a July Knight Frank retail record. The growth happens regardless of reduced tourist arrivals following a short-lived boost due to top-level performances in the initial quarter of the year.
While the retail industry in Singapore stays appealing to retailers, Hsu keeps in mind that inflation and a good Singapore money have actually tempered growth as sellers face increasing operating costs.
Since 1H2024, prime leas islandwide have actually grown 1.5%, supported by the post-pandemic recovery and new openings by local and international brands. This includes British footwear merchant Hunter that started its very first establishment in Singapore at Plaza Singapura and French activewear company Hoka’s beginning in Ion Orchard. The F&B sector was joined by beginners Ipoh Town, a Malaysian traditional coffeehouse at Jewel Changi International Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.
