Singapore’s retail market registers second consecutive growth year as rents increase 0.5% y-o-y in 2024

The latest information shows that retail rents raised 0.6% q-o-q in 4Q2024, building on the quarterly increase of 0.3% documented in 3Q2024.

On the other hand, Leonard Tay, head of study at Knight Frank Singapore, believes that the fairly strong Singapore money and inflationary cost pressures could spur several locals to redirect their retail costs offshore. “Prime retail rental development for 2025 is expected to ease and stabilise within a forecasted range of between 1% and 3%,” he states.

Wong notes that vacancy rates in the OCR increased slightly to 4.3% in 4Q2024, ascend from 4.2% in 4Q2023 yet still below the pre-pandemic 6.2% in 4Q2019, which shows a tough suburban retail market. He adds: “Improved connectivity and assorted retail products, including life-style and dining choices, have actually improved country appeal, drawing in well-known overseas F&B companies. Japan’s Warabimochi Kamakura and Hong Kong’s Ging Sun Ho King of Bun have actually debuted at One Holland Village and Tampines Mall, specifically.”

” Stores continue to integrate experiential aspects into their bricks-and-mortar stores, to improve the buying experience and drive consumer activity. Zara and Levi’s reopened at ION Orchard in 2024, with Zara launching express in-store pick-up and Levi’s revealed its initial Dressmaker Outlet,” claims Wong Xian Yang, head of study Singapore & SEA at Cushman & Wakefield.

Net retail necessity in the Outside Central Region got to 560,000 sq ft in 2024, over 4 times the 129,000 sq ft in 2023, while net supply completed 603,000 sq ft.

“Lease development ability, however, could be moderated by usage leakage arising from outgoing travel and the durability of the Singapore dollar, in addition to sellers’ sensitivity to rent out hikes among a tough and unsure operating setting,” claims Phua. Based on JLL Study’s retail property portfolio, she anticipates leas for prime floor area of investment-grade retail assets to continue expanding by 1.5 to 2.5% y-o-y in 2025.

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The downward fad in the island wide retail vacancy pace, which slipped for the 3rd successive quarter, underpinned resistant occupant need amidst a moderate supply of retail room this year, claims Phua.

Rental development in Singapore’s retail real estate sector recorded an annual increase of 0.5% for the whole of 2024, according to property statistics published by URA on Jan 24. This notes the 2nd succeeding year that the local retail market has found rental fees improve, after increasing 0.4% y-o-y in 2023.

Looking in advance, the island-wide retail vacancy rate is expected to continue to be tight this year, which ought to sustain rental development for prime retail spots, states Phua. She includes that the marketplace will be buoyed by sustained domestic consumption, a tighter labour market, and a favorable tourism overview in 2025.

In addition, the island-wide vacancy level in the retail real estate market slipped 0.3% q-o-q to 6.2% in 4Q2024. This was mainly driven by decreases in the opportunity rates in the Central Region (dropping 0.4% q-o-q to 7.2%) and Outside Central Region (dropping 0.3% q-o-q to 4.3%) previous quarter.

Angelia Phua, consulting director of research study and consultancy, Singapore, at JLL, states that the latest leasing and cost data show that the healing in the more comprehensive retail property industry is mostly on track in spite of recurring economic challenges such as intake leakage, the dampening effects of cost inflation on intake and price stress dealt with by retail operators.

For instance, French sports brand Salomon opened up avenues at Ngee Ann City and Orchard Central, while Finnish lifestyle brand Marimekko launched its 2nd site at Ngee Ann City after its 2023 released at ION Orchard.

Not only prime retail areas in the Central Region have found an uptick in demand. Net retail need in the Outside Main Area (OCR) was 560,000 sq ft past year, around 4 times the 129,000 sq ft consumed in 2023.

She includes that brand-new demand for retail area was spearheaded by the entry of new-to-market companies and the development of occurring brands such as F&B, active lifestyle and sports, fashion labels, as well as beauty and wellness products.

On the other hand, retail prices dipped 1.3% q-o-q in 4Q2024, almost getting rid of the quarterly raise of 1.7% that was documented in 3Q2024. Nevertheless, retail prices finished 2024 with an increase of 1.0% y-o-y compared to the 1.2% y-o-y surge notched in 2023.


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