Singapore retail vacancy rate stable at 7.5% in Q2

Retail market sentiments improved as tourist arrivals recovered.

According to Savills, Singapore’s vacancy rate for retail space remained stable at 7.5% in Q2. In Q1/2023, it was 7.6% in Q1. Despite new completions such as The Woodleigh Mall (133,500 sq ft retail GFA), healthy take-up rate in suburban malls helped keep the vacancy rate in Outside Central Region (Suburban Area) flat at 4.0% in Q2 (4.1% in Q1). 

Here’s more from Savills:

The Orchard Planning area saw a 0.7% decline in vacancy rate, improving from the 13.9% recorded in Q1/2023. In the Central Region, vacancies eased slightly by 0.2 ppt QoQ to 9.2% in Q2. 

Market sentiments in the retail sector have been improving on the back of the tourism recovery. The Urban Redevelopment Authority’s (URA) retail rental index rose 0.3% QoQ in Q2, reversing a five-quarter decline. While rents in the Fringe Area registered a marginal 0.1% QoQ increase, the Central Area saw a bigger improvement of 0.4% QoQ. The latter is likely to be driven by the recovery in tourism and this often benefits the popular tourist destinations such as Orchard Area and Marina Bay Area. 

As such, the average rent in Savills basket of prime malls trended upwards in Q2, with rents in Orchard Area rising 1.4% QoQ to S$22.10 per sq ft. For the Suburban Area, the average rent in the Savills basket rose by 0.7% QoQ to S$14.50 per sq ft in Q2.