Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank

Knight Frank defines top retail locations as rental-yielding units of 350 to 1,500 sq ft with the best front view, connectivity, footfall and availability in a mall, just like ground- or basement-floor retail shopping center units linked to an MRT terminal or bus interchange.

In the middle of this unsure setting, Hsu believes prime retail rental progression will likely be weaker for the remainder of the year, as climbing costs can potentially discourage expansion by stores and compel consolidation as an alternative. Even so, he believes leas are still on the right track to expand in between 2% and 4% for the whole year, unchanged from his earlier estimates.

Prime retail spots in the city-fringe observed the top rental growth in 2Q2024, increasing 1.3% q-o-q to $23.70 psf pm. Prime leas in suburbs climbed up 1.2% q-o-q to $26.50 psf pm, complied with by the Marina Centre, City Hall and Bugis place (up 1% q-o-q to $25.50 psf pm) and the Orchard place (up 0.6% q-o-q to $30.70 psf pm).

The standard prime retail leas islandwide expanded by 0.9% q-o-q and 3.8% y-o-y to reach $27.40 psf monthly (psf pm) in 2Q2024, according to a July Knight Frank retail record. The growth comes despite lower traveler appearances following a short-term boom due to high-profile shows in the first quarter of the year.

While Taylor Swift and Coldplay concert-goers enhanced visitors to a spike of nearly 1.5 million in March, traveller arrivings secured last quarter, with 1.4 million guests reported in April and 1.3 million tourists documented in May and June specifically.

Data from the Audit and Corporate Regulatory Authority show that retail and F&B company cessations amounted to 2,631 in 2Q2024, going beyond the 2,502 services formed throughout the exact same duration. This is a reverse from the last quarter when there was a net boost of 295 new retail and F&B ventures.

Singapore’s total retail sales (leaving out motor vehicles) dropped from $3.5 billion in March to $3.3 billion in April, in tandem with the lower foreigner returns. Nonetheless, May observed a pick up to $3.6 billion, generated by food items and alcohol expenditures. Retail action seems to have actually adjusted to maintainable status in 2Q2024, following the concert-heavy months in 1Q2024, mentions Ethan Hsu, Knight Frank’s head of retail.

Midtown Modern price

As of 1H2024, prime leas islandwide have increased 1.5%, supported by the post-pandemic recovery and new launchings by local and international brands. This includes British footwear store Hunter that began its first shop in Singapore at Plaza Singapura and French sports wear brand Hoka’s opening in Ion Orchard. The F&B industry was joined by beginners Ipoh Town, a Malaysian classic coffee shop at Jewel Changi Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.

While the retail store field in Singapore continues to be attractive to retailers, Hsu keeps in mind that rising cost of living and a good Singapore money have actually tempered growth as sellers encounter ascending operating costs.


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