Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Knight Frank defines prime retail places as rental-yielding units of 350 to 1,500 sq ft with the greatest frontage, connectivity, footfall and accessibility in a shopping mall, for instance, ground- or basement-floor retail industry shopping mall units connected to an MRT station 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 lower visitor arrivals. Nevertheless, May saw a revive to $3.6 billion, driven by food and alcohol expenditures. Retail activity appears to have actually readjusted to maintainable status in 2Q2024, mirroring the concert-heavy months in 1Q2024, mentions Ethan Hsu, Knight Frank’s head of retail.
The standard prime retail rentals islandwide expanded by 0.9% q-o-q and 3.8% y-o-y to reach $27.40 psf monthly (psf pm) in 2Q2024, according to a July Knight Frank retail report. The growth occurs despite lower visitor appearances following a short-term boom because of high-profile performances in the first quarter of the year.
Prime retail places in the city-fringe saw the highest possible rental buildup in 2Q2024, rising 1.3% q-o-q to $23.70 psf pm. Prime rental fees in suburban areas climbed up 1.2% q-o-q to $26.50 psf pm, followed by the Marina Centre, City Hall and Bugis part (up 1% q-o-q to $25.50 psf pm) and the Orchard part (up 0.6% q-o-q to $30.70 psf pm).
Amidst this unsure atmosphere, Hsu thinks prime retail rental progression will likely be slow for the rest of the year, as rising prices might possibly deter expansion by sellers and oblige consolidation instead. Nonetheless, he believes leas are still on track to grow in between 2% and 4% for the entire year, unmodified from his earlier projections.
As of 1H2024, prime rental fees islandwide have expanded 1.5%, sustained by the post-pandemic regeneration and new openings by local and international labels. This includes British footwear store Hunter that opened up its first outlet in Singapore at Plaza Singapura and French activewear brand Hoka’s opening in Ion Orchard. The F&B industry was joined by beginners Ipoh Town, a Malaysian classic coffee bar at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
While Taylor Swift and Coldplay concert-goers enhanced site visitors to a point of almost 1.5 million in March, visitor arrivings stabilised last quarter, with 1.4 million tourists documented in April and 1.3 million visitors logged in May and June respectively.
While the retail industry field in Singapore remains attractive to retailers, Hsu keeps in mind that rising cost of living and a strong Singapore dollar have actually tempered development as sellers encounter going up operating expense.
Information from the Accountancy and Corporate Regulatory Authority reveal that retail and F&B service cessations totalled 2,631 in 2Q2024, exceeding the 2,502 businesses created throughout the exact same duration. This is a reverse from the last quarter when there was a net rise of 295 new retail and F&B ventures.