Orchard prime retail space sees strong take-up in 1Q2024, with Central Area rents up 0.2% q-o-q
Vacancy rates in the Orchard region were lower to 6.4% in 1Q2024 from 8.7% in 4Q2023, the most affordable ever since the beginning of the pandemic.
Still, underpinned by tough local area usage and customer traffic above pre-Covid ranks, merchants continued to take prime retail rooms in the OCR, says C&W’s Wong. For example, the Chinese sportswear manufacturer Beneunder picked to released at Westgate Shopping center in Jurong East in 2023. Hong Kong cosmetics chain Sa resumed at Jurong Point previous quarter and is opening 3 even more shops in the OCR in 2Q2024.
Lentor Mansion showflat location
The Orchard region saw the best take-up in retail space during the quarter, with net demand of 43,000 sq ft or 80% of complete take-up in the Central Place. Stores in the Orchard location were spurred to occupy even more space as tourist landings in 1Q2024 climbed by 49.6% y-o-y, bolstered by a five-fold boost in Chinese visitors, states Song.
For instance, fashion brand Zara shut its retail store in Marina Square mall, while Times Bookstores shuttered its avenues in Plaza Singapura and Waterway Point. After releasing here 2 years beforehand, South Korean convenience store Emart24 closed all 3 sites in Singapore in March. Tom & Stefanie, a children’s fashion store, shut its shop at West Shopping mall after 25 years.
Nonetheless, the pipeline of business travel and meetings, incentive travel, conventions and exhibitions (BTMICE), enhanced air travel connection and ability with the upcoming Changi Terminal 5 will certainly further increase the tourists recovery and, in turn, the retail field, notes JLL’s Phua.
URA’s 1Q2024 information revealed costs of retail investments were up 1.8% q-o-q, noting the fourth straight quarterly increase. Phua connects the increase in asset prices to entrepreneurs alloting even more resources to high quality retail resources. Entrepreneurs are drawn to the field because of the good supply-demand principles, favorable yield stretch over funding prices and shortage value of such properties.
In 1Q2024, retail place leas in the Central Region dropped somewhat by 0.4% q-o-q, expanding the downturn of 0.1% q-o-q the last quarter. Nevertheless, islandwide prime floor rental fees were up by 1% q-o-q, after a 1.2% q-o-q surge the past quarter.
“The reseller industry continues to be two-tiered,” states Tricia Song, CBRE head of study for Singapore and Southeast Asia. Second areas remain to see softer demand for retail space contrasted to prime spot.
Retail rents in the Central Location nudged up 0.2% q-o-q, primarily as a result of the Orchard area, states Wong Xian Yang, Cushman & Wakefield (C&W) head of research for Singapore and Southeast Asia. On the other hand, retail store rentals in the Fringe Locations dropped 1.8% q-o-q in 1Q2024.
Angelia Phua, JLL Singapore consulting supervisor for research & consultancy, indicates that higher functional costs, intense competitors, unpopular retail ideas and shifting consumer preferences have also resulted in some store closings and a rise in vacancy rates.
In the Orchard location, great jewelry chain Swarovski opened its largest store of approximately 2,300 sq ft at Wisma Atria. Homegrown womenswear brand Klarra’s opened up a 1,500 sq ft main store at ION Orchard. With the improved retail need, malls which include Paragon and Wisma Atria had achieved complete tenancy by the end of 2023, Wong adds.
The Outside Central Region (OCR) found an unfavorable net involvement in retail place of about 54,000 sq ft in 1Q2024. Vacancy cost in the OCR boosted to 4.4% in 1Q2024 from 3.9% in the previous quarter. CBRE associates it to combination in chosen field markets and prevention to high rents.
