Fresh signs that Singapore retail rental rates have bottomed out
Singapore retail rental rates have bottomed out, with modest increases for the second successive quarter this year.
Property company Edmund Tie & Company says monthly gross rents of first-storey retail space in the Orchard Road-Scotts Road precinct increased by 0.5 per cent quarter-on-quarter to $37.60 per square foot in the second quarter of this year.
Similarly, monthly rents of first-storey retail space in the suburban areas grew by 0.5 per cent to $30.75 per square foot.
With gross rents of first-storey space in the other city areas unchanged at $19.75, the city’s overall improvement was 0.4 per cent to $23.95.
Edmund Tie & Company’s Real Estate Times research report says demand for space in the Orchard Road – Scotts Road area was positive as visitor arrivals rose and tourism receipts increased.
“To capture the diverse profile of shoppers who visit Orchard Road – Scotts Road, various high-end brands from overseas have expanded into Singapore. These include Israel-based bath and body brand, Sabon, which opened its first Southeast Asia flagship boutique at Ngee Ann City shopping centre. German luxury brand MCM has also expanded into Singapore with its first MCM Haus at Paragon.”
Suburban rents were bolstered by a positive change in demand of around 107,000sqft reported in the first quarter.
“Many F&B and retail brands that cater to the masses have established their presence in suburban malls. For instance, frozen yoghurt brand Llaollao has relaunched at Changi Airport. Separately, American headwear company New Era opened its first Singapore store at VivoCity,” the report said.
Edmund Tie & Company says about 2.5 million sqft of retail space is in the pipeline, most of it scheduled for completion in the second half of this year or early next. That includes additions and alterations to TripleOne Somerset, scheduled to open this year.
“Moving forward, more retail stores will incorporate technology into their operations to focus on experiential shopping. They will continue to adopt an omnichannel strategy to capture a greater market share. These strategies are necessary to maintain their foothold in the industry.”
The company cited homegrown fashion brand M)phosis, set to reopen its physical store at Century Square to include a smart fitting room for its customers, which includes smart mirror displays and launch an e-commerce store.
“Additionally, more landlords are introducing a shop, live and work concept into their malls. This is done by introducing more new-to-market brands and incorporating co-working spaces and lifestyle concepts. For example, the new Funan Mall will include a theatre run by W!ld Rice. The integration of such concepts allows for greater diversity of tenants and for everyone to have a purpose to visit the mall.”