Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Since 1H2024, prime rents islandwide have grown 1.5%, supported by the post-pandemic regeneration and new launchings by local and foreign brands. This includes British footwear retailer Hunter that opened its 1st outlet in Singapore at Plaza Singapura and French activewear brand Hoka’s introduction in Ion Orchard. The F&B field was signed up with by newcomers Ipoh Town, a Malaysian old-fashioned coffee shop at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
The standard prime retail leas islandwide expanded by 0.9% q-o-q and 3.8% y-o-y to get to $27.40 psf per month (psf pm) in 2Q2024, according to a July Knight Frank retail record. The progress comes regardless of reduced tourist landings complying with a brief boom as a result of top-level performances in the first quarter of the year.
Amidst this unpredictable environment, Hsu believes prime retail rental progression will likely be slow for the remainder of the year, as rising expenses could potentially hinder growth by sellers and compel consolidation as an alternative. Nonetheless, he believes rents are still on track to grow between 2% and 4% for the entire year, unmodified from his earlier forecasts.
Prime retail places in the city-fringe saw the top leasing improvement in 2Q2024, climbing 1.3% q-o-q to $23.70 psf pm. Prime leas in suburbs climbed 1.2% q-o-q to $26.50 psf pm, followed by the Marina Centre, City Hall and Bugis area (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).
Whilst the retail store market in Singapore remains appealing to retailers, Hsu notes that inflation and a strong Singapore dollar have actually tempered development as retailers deal with rising operating expense.
While Taylor Swift and Coldplay concert-goers boosted site visitors to a spike of nearly 1.5 million in March, tourist arrivings secured last quarter, with 1.4 million guests documented in April and 1.3 million tourists documented in May and June specifically.
Information from the Bookkeeping and Corporate Regulatory Authority reveal that retail and F&B company cessations amounted to 2,631 in 2Q2024, going beyond the 2,502 companies created throughout the exact same duration. This is a turn around from the past quarter when there was a net increase of 295 brand-new retail and F&B business.
Knight Frank defines prime retail locations as rental-yielding units of 350 to 1,500 sq ft with the best frontage, online connectivity, footfall and availability in a shopping mall, such as ground- or basement-floor retail industry mall units connected to an MRT terminal or bus interchange.
Singapore’s total retail sales (leaving out motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the lesser tourist arrivals. Nonetheless, May observed a bounce back to $3.6 billion, steered by food and alcohol expenditures. Retail activity turns up to have readjusted to sustainable ranks in 2Q2024, mirroring the concert-heavy months in 1Q2024, indicates Ethan Hsu, Knight Frank’s head of retail.
