Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Information from the Accountancy and Corporate Regulatory Authority show that retail and F&B business cessations completed 2,631 in 2Q2024, surpassing the 2,502 businesses developed during 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 ventures.
While the retail field in Singapore remains appealing to retailers, Hsu notes that rising cost of living and a solid Singapore dollar have solidified development as stores face going up operating expense.
Amidst this unpredictable environment, Hsu believes prime retail rental progress will likely be slow for the remainder of the year, as increasing costs can potentially prevent development by merchants and compel incorporation instead. Nonetheless, he thinks rental fees are still on the right track to grow between 2% and 4% for the entire year, unchanged from his earlier projections.
Since 1H2024, prime leas islandwide have actually increased 1.5%, assisted by the post-pandemic regeneration and new beginnings by local and foreign brand names. This includes British footwear store Hunter that started its very first shop in Singapore at Plaza Singapura and French sportswear brand name Hoka’s beginning in Ion Orchard. The F&B field was signed up with by starters Ipoh Town, a Malaysian traditional coffeehouse at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
Prime retail sectors in the city-fringe saw the highest rentals growth in 2Q2024, increasing 1.3% q-o-q to $23.70 psf pm. Prime leas in suburbs climbed up 1.2% q-o-q to $26.50 psf pm, followed by the Marina Centre, City Hall and Bugis place (up 1% q-o-q to $25.50 psf pm) and the Orchard part (up 0.6% q-o-q to $30.70 psf pm).
While Taylor Swift and Coldplay concert-goers improved visitors to a spike of close to 1.5 million in March, visitor arrivings stabilised last quarter, with 1.4 million visitors reported in April and 1.3 million tourists recorded in May and June specifically.
Singapore’s complete retail sales (excluding motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the reduced visitor arrivals. Still, May saw a bounce back to $3.6 billion, driven by food and alcohol shopping. Retail action turns up to have actually adjusted to sustainable ranks in 2Q2024, following the concert-heavy months in 1Q2024, mentions Ethan Hsu, Knight Frank’s head of retail.
Knight Frank specifies top retail spots as rental-yielding units of 350 to 1,500 sq ft with the best frontage, connectivity, footfall and accessibility in a shopping mall, like ground- or basement-floor retail industry shopping center units connected to an MRT terminal or bus interchange.
The average prime retail leas islandwide expanded 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 report. The development comes despite lesser visitor arrivals complying with a brief boost because of high-profile performances in the very first quarter of the year.
