Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Since 1H2024, prime rental fees islandwide have actually expanded 1.5%, assisted by the post-pandemic revival and new beginnings by local and international companies. This consists of British footwear merchant Hunter that opened its very first outlet in Singapore at Plaza Singapura and French sports apparel brand name Hoka’s opening in Ion Orchard. The F&B industry was signed up with by starters Ipoh Town, a Malaysian traditional coffee bar at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
Knight Frank specifies top retail places as rental-yielding units of 350 to 1,500 sq ft with the greatest front view, connectivity, footfall and accessibility in a mall, such as ground- or basement-floor retail industry mall units linked 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 returns. Still, May saw a pick up to $3.6 billion, generated by food and liquor shopping. Retail activity shows up to have readjusted to safe ranks in 2Q2024, mirroring the concert-heavy months in 1Q2024, notes Ethan Hsu, Knight Frank’s head of retail.
Whilst the retail industry field in Singapore stays appealing to retailers, Hsu keeps in mind that rising cost of living and a solid Singapore money have tempered development as merchants face rising operating expense.
Prime retail sectors in the city-fringe observed the highest possible rentals growth in 2Q2024, rising 1.3% q-o-q to $23.70 psf pm. Prime leas in suburban areas went up 1.2% q-o-q to $26.50 psf pm, adhered to by the Marina Centre, City Hall and Bugis section (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).
Amid this uncertain atmosphere, Hsu thinks prime retail rental progression will likely be slow for the remainder of the year, as climbing expenses can potentially discourage growth by sellers and urge incorporation instead. Nonetheless, he believes leas are still on course to grow between 2% and 4% for the whole year, unmodified from his earlier forecasts.
Information from the Bookkeeping and Corporate Regulatory Authority show that retail and F&B company cessations amounted to 2,631 in 2Q2024, going beyond the 2,502 companies formed throughout the same duration. This is a switch from the previous quarter when there was a net boost of 295 new retail and F&B enterprises.
The average prime retail leas islandwide grew 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 record. The growth happens despite lesser vacationer arrivals adhering to a short-term boost due to high-profile concerts in the very first quarter of the year.
While Taylor Swift and Coldplay concert-goers improved site visitors to a spike of nearly 1.5 million in March, traveller arrivals secured last quarter, with 1.4 million visitors recorded in April and 1.3 million guests recorded in May and June specifically.