Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Singapore’s overall retail sales (omitting motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the reduced foreigner arrivals. Still, May saw a pick up to $3.6 billion, driven by food items and liquor expenditures. Retail action turns up to have adjusted to maintainable ranks in 2Q2024, following the concert-heavy months in 1Q2024, mentions Ethan Hsu, Knight Frank’s head of retail.
While Taylor Swift and Coldplay concert-goers boosted site visitors to a point of almost 1.5 million in March, traveller arrivings secured last quarter, with 1.4 million visitors recorded in April and 1.3 million guests recorded in May and June respectively.
Prime retail spaces in the city-fringe saw the top rental buildup in 2Q2024, climbing 1.3% q-o-q to $23.70 psf pm. Prime leas in suburbs went up 1.2% q-o-q to $26.50 psf pm, complied with by the Marina Centre, City Hall and Bugis section (up 1% q-o-q to $25.50 psf pm) and the Orchard area (up 0.6% q-o-q to $30.70 psf pm).
The standard prime retail rentals islandwide expanded by 0.9% q-o-q and 3.8% y-o-y to reach $27.40 psf each month (psf pm) in 2Q2024, according to a July Knight Frank retail report. The development occurs in spite of reduced visitor appearances following a short-lived boost due to prominent performances in the initial quarter of the year.
Whilst the retail industry in Singapore stays attractive to retailers, Hsu keeps in mind that rising cost of living and a solid Singapore money have actually tempered growth as merchants encounter going up operating expense.
In the middle of this uncertain atmosphere, Hsu believes prime retail rental development will likely be slower for the remainder of the year, as climbing prices might potentially prevent development by retailers and urge incorporation as an alternative. Even so, he thinks leas are still on course to expand between 2% and 4% for the whole year, the same from his earlier forecasts.
Data from the Accountancy and Corporate Regulatory Authority reveal that retail and F&B business cessations totalled 2,631 in 2Q2024, going beyond the 2,502 organizations developed during the exact same period. This is a reverse from the past quarter when there was a net rise of 295 brand-new retail and F&B ventures.
Since 1H2024, prime rents islandwide have actually expanded 1.5%, supported by the post-pandemic revival and new beginnings by local and international brand names. This consists of British shoes store Hunter which opened its 1st shop in Singapore at Plaza Singapura and French activewear company Hoka’s introduction in Ion Orchard. The F&B market was signed up with by startups Ipoh Town, a Malaysian traditional coffee shop at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.
Knight Frank defines prime retail spaces as rental-yielding units of 350 to 1,500 sq ft with the most ideal frontage, connectivity, footfall and access in a mall, just like ground- or basement-floor retail industry mall units connected to an MRT terminal or bus interchange.
