Prime retail rents in Singapore up 1.2% q-o-q in 1Q2023: Knight Frank

Singapore’s retail sector remains on the rise with tourism numbers continuing to pick up. Knight Frank’s report noted that gross rent of prime spaces averaged $26.40 psf per month (psf pm) in 1Q2023 – a 1.2% q-o-q and 5% y-o-y growth.

The ongoing recovery in the tourism sector has been instrumental in this growth, with Singapore welcoming more than 2.9 million visitors in 1Q2023. The average stay of visitors to Singapore has also risen from an average of 3.34 days in 2019 to 3.97 days in the earlier part of 2023, signalling a return to normalcy.

This has been especially noticeable in the prime Orchard Road shopping strip, with the area having seen a growth in retail rents of 1.4% q-o-q and 5.2% y-o-y in 1Q2023. Similarly, prime retail rents in the Marina Centre, City Hall and Bugis area rose 1.3% q-o-q and 5.2% y-o-y to reach $24.20 psf pm, while retails rents in the City Fringe grew 1.4% q-o-q and 4.4% y-o-y to $22.60 psf pm. Rents in suburban malls also remained stable, inching up 0.6% q-o-q to $26.20 psf pm, or 3.6% higher y-o-y.

However, consumer spending has become more conservative due to inflationary pressures this year, resulting in an 18.7% m-o-m fall in retail sales (excluding motor vehicles) in February. Retail sales volume remains above levels recorded during the pandemic, but slightly lower than pre-pandemic sales volume recorded in February 2019.

In an effort to attract more shoppers, Singapore has seen an influx of international luxury brands opening new stores, alongside the introduction of new F&B entrants. These include Giuseppe Zanotti, Grand Seiko, Atelier Cologne, Unatoto, Takagi Coffee, Hanazen, Luckin Coffee and Tim Hortons. Hong Kong’s cosmetics chain Sasa is planning a return too, despite having closed its 22 outlets in the city-state three years ago.

Major milestone in Singapore’s property market: New Tengah Plantation Close EC development provides great amenities and transportation options for those working in the CBD. Located in the western part of Singapore, Tengah Plantation EC it offers easy access to the MRT network.

As 12 to 14 million tourist arrivals are expected in 2023, the retail sector in Singapore is expected to continue growing. Knight Frank’s report also highlights that prime retail rents in the country should register moderate gains of between 3% and 5% this year. Despite certain headwinds such as inflation and economic uncertainty, Singapore’s retail sector appears to be firmly entrenched in its recovery.