Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Amidst this uncertain environment, Hsu believes prime retail rental growth will likely be sluggish for the rest of the year, as increasing costs might possibly deter expansion by retailers and urge consolidation as an alternative. Nevertheless, he thinks rents are still on track to grow between 2% and 4% for the entire year, unmodified from his earlier estimates.
As of 1H2024, prime rents islandwide have actually grown 1.5%, assisted by the post-pandemic revival and new beginnings by local and international labels. This consists of British shoes retailer Hunter which opened its first establishment in Singapore at Plaza Singapura and French sports apparel company Hoka’s introduction in Ion Orchard. The F&B industry was joined by startups Ipoh Town, a Malaysian traditional coffee shop at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea chain at Taste Orchard.
Prime retail spaces in the city-fringe saw the highest possible rentals buildup in 2Q2024, increasing 1.3% q-o-q to $23.70 psf pm. Prime rental fees in suburbs climbed up 1.2% q-o-q to $26.50 psf pm, followed 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).
While the retail industry in Singapore continues to be attractive to retailers, Hsu keeps in mind that inflation and a good Singapore money have tempered development as sellers deal with rising operating expense.
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 reduced visitor arrivals. Still, May observed a revive to $3.6 billion, driven by food items and booze expenditures. Retail action turns up to have actually readjusted to safe ranks in 2Q2024, mirroring the concert-heavy months in 1Q2024, indicates Ethan Hsu, Knight Frank’s head of retail.
Information from the Accountancy and Corporate Regulatory Authority reveal that retail and F&B service cessations completed 2,631 in 2Q2024, going beyond the 2,502 services created throughout the very same period. This is a turn around from the past quarter when there was a net increase of 295 brand-new retail and F&B business.
The common prime retail rentals islandwide expanded by 0.9% q-o-q and 3.8% y-o-y to get to $27.40 psf monthly (psf pm) in 2Q2024, according to a July Knight Frank retail report. The development happens regardless of lesser vacationer appearances complying with a short-term boom because of high-profile shows in the very first quarter of the year.
While Taylor Swift and Coldplay concert-goers increased visitors to a point of nearly 1.5 million in March, tourist arrivings stabilised last quarter, with 1.4 million tourists recorded in April and 1.3 million guests logged in May and June respectively.
Knight Frank specifies top retail locations as rental-yielding units of 350 to 1,500 sq ft with the most ideal frontage, connectivity, footfall and availability in a mall, like ground- or basement-floor retail industry mall units linked to an MRT station or bus interchange.
