Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Data from the Audit and Corporate Regulatory Authority reveal that retail and F&B business cessations totalled 2,631 in 2Q2024, exceeding the 2,502 businesses formed throughout the same duration. This is a reverse from the previous quarter when there was a net increase of 295 new retail and F&B ventures.
Singapore’s total retail sales (omitting motor vehicles) fell from $3.5 billion in March to $3.3 billion in April, in tandem with the lesser tourist arrivals. Nevertheless, May saw a pick up to $3.6 billion, steered by food items and alcohol shopping. Retail action shows up to have adjusted to safe levels in 2Q2024, mirroring the concert-heavy months in 1Q2024, mentions Ethan Hsu, Knight Frank’s head of retail.
Bagnall Haus Upper East Coast Road
While the retail industry market in Singapore stays appealing to retailers, Hsu notes that rising cost of living and a solid Singapore dollar have solidified growth as stores deal with increasing operating costs.
Amid this unsure setting, Hsu thinks prime retail rental progression will likely be weaker for the remainder of the year, as increasing costs could likely prevent expansion by stores and urge consolidation as an alternative. Nevertheless, he thinks rental fees are still on the right track to expand in between 2% and 4% for the entire year, unchanged from his earlier projections.
The common prime retail rents 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 growth occurs despite lesser vacationer arrivals complying with a brief boom because of prominent concerts in the initial quarter of the year.
As of 1H2024, prime leas islandwide have actually increased 1.5%, supported by the post-pandemic recovery and new launchings by local and foreign brand names. This includes British footwear seller Hunter that opened up its 1st store in Singapore at Plaza Singapura and French sportswear brand Hoka’s opening in Ion Orchard. The F&B sector was joined by startups Ipoh Town, a Malaysian traditional cafe at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.
Prime retail places in the city-fringe viewed the top leasing buildup in 2Q2024, increasing 1.3% q-o-q to $23.70 psf pm. Prime rental fees in suburbs went up 1.2% q-o-q to $26.50 psf pm, complied with by the Marina Centre, City Hall and Bugis area (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).
Knight Frank defines prime retail places as rental-yielding units of 350 to 1,500 sq ft with the greatest frontage, connectivity, footfall and ease of access in a mall, just like ground- or basement-floor retail industry mall units linked to an MRT terminal or bus interchange.
While Taylor Swift and Coldplay concert-goers increased site visitors to a spike of nearly 1.5 million in March, traveller arrivals secured last quarter, with 1.4 million guests documented in April and 1.3 million tourists recorded in May and June specifically.
