Singapore prime retail rents to grow by up to 5% this year

Thanks to more tourist arrivals expected in the coming months.

Despite the clouded economic outlook, a report by Knight Frank says a silver lining remains for the retail sector in Singapore with the steady recovery of visitor arrivals, the influx of major international events and the return of domestic and tourist shopper crowds. 

“With more visitors expected at live events in the coming months, such as the Singapore Grand Prix in September, retailers and F&B operators, especially in the tourist zones of Orchard Road, the civic centre, and the Singapore River, will likely be presented with more opportunities for growth in the second half of 2023. Hence, prime retail rents remain on course to increase between 3% to 5% for the whole of 2023,” the report added.

Here’s more from Knight Frank:

As Singapore reestablishes itself as a venue for business, entertainment and lifestyle events post-pandemic, older shopping centres such as the strata-subdivided ones along Orchard Road are under pressure to update and upgrade. Strata malls are often a mishmash of trades due to owners who operate their own retail or F&B concept as well as others who lease out their units based on rent rates without sufficient consideration for concept type or trade synergies. 

This often leads to a weak retail experience due to the non-complementary trade-mix which in turn fails to attract shoppers. In a post-pandemic landscape, these malls would benefit from a re-design in terms of mall positioning and trade-mix strategy so as to provide a holistic shopper experience and appeal to a new generation of customers. 

Although economic headwinds and labour worries have made the retail trading environment more challenging, a stream of international brands continued to make inroads into Singapore. New brands included M5 Coffee from Taiwan, and Sun & Sand Sports from the United Arab Emirates, while brands that have returned included English chain Ben’s Cookies that previously shuttered its doors in 2021. 

Stores with special concepts also landed here, such as Coach’s first ever café and Gashapon Bandai, a speciality store from Japan that offers a wide range of specially designed vending machines dispensing capsule toys, expanding variety in the retail sector.