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

Rental growth in Singapore’s retail property market recorded an annual raise of 0.5% for the whole of 2024, according to real estate statistics released by URA on Jan 24. This notes the 2nd succeeding year that the local retail market has actually observed leas increase, after increasing 0.4% y-o-y in 2023.

Angelia Phua, consulting supervisor of research and consultancy, Singapore, at JLL, says that the most up to date rental and cost statistics show that the recovery in the wider retail property market is mainly on course despite continuous economic obstacles such as usage leakage, the dampening results of cost rising cost of living on consumption and price tensions encountered by retail drivers.

The down pattern in the island wide retail vacancy rate, which slipped for the 3rd sequent quarter, underpinned durable occupant demand amid a moderate supply of retail area this year, says Phua.

On the other hand, market prices dipped 1.3% q-o-q in 4Q2024, close to eliminating the quarterly rise of 1.7% that was recorded in 3Q2024. Nevertheless, retail prices finished 2024 with a boost of 1.0% y-o-y compared to the 1.2% y-o-y increase notched in 2023.

Not only prime retail rooms in the Central Region have viewed an uptick in need. Net retail interest in the Outside Central Region (OCR) was 560,000 sq ft last year, about 4 times the 129,000 sq ft absorbed in 2023.

Net retail interest 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 totalled 603,000 sq ft.

Pinetree Hill condominium

In addition, the island-wide openings level in the retail property industry slid 0.3% q-o-q to 6.2% in 4Q2024. This was largely steered by decreases in the opportunity rates in the Central Area (dropping 0.4% q-o-q to 7.2%) and Outside Central Region (falling 0.3% q-o-q to 4.3%) previous quarter.

On the other hand, Leonard Tay, head of research at Knight Frank Singapore, says that the fairly strong Singapore dollar and inflationary price stress could spur several locals to reroute their retail costs overseas. “Prime retail rental development for 2025 is expected to relieve and stabilise within a forecasted range of between 1% and 3%,” he says.

As an example, French sports brand Salomon opened up avenues at Ngee Ann City and Orchard Central, while Finnish lifestyle brand name Marimekko started its second outlet at Ngee Ann City after its 2023 released at ION Orchard.

She includes that new interest for retail space was pioneered by the entrance of new-to-market brands and the development of occurring companies such as F&B, active lifestyle and sports, fashion companies, along with beauty and wellness products.

Looking in advance, the island-wide retail openings rate is expected to continue to be tight this year, which ought to sustain rental growth for prime retail spaces, states Phua. She adds that the market will be buoyed by sustained domestic consumption, a tighter labour market, and a positive tourism outlook in 2025.

” Stores remain to integrate experiential aspects right into their bricks-and-mortar establishments, to enhance the shopping experience and drive customer activity. Zara and Levi’s resumed at ION Orchard in 2024, with Zara releasing express in-store pick-up and Levi’s revealed its very first Tailor Shop,” claims Wong Xian Yang, head of research Singapore & SEA at Cushman & Wakefield.

“Rent development possibility, however, could be regulated by intake leak arising from outgoing travel and the power of the Singapore money, as well as retailers’ sensitivity to rent out hikes amidst a challenging and uncertain operating atmosphere,” says Phua. Based on JLL Research’s retail possession profile, she anticipates leas for prime flooring room of investment-grade retail assets to proceed expanding by 1.5 to 2.5% y-o-y in 2025.

The most up to date information indicates that retail leas increased 0.6% q-o-q in 4Q2024, establishing on the quarterly rise of 0.3% documented in 3Q2024.

Wong mentions that vacancy rates in the OCR increased somewhat to 4.3% in 4Q2024, up from 4.2% in 4Q2023 yet still below the pre-pandemic 6.2% in 4Q2019, that mirrors a tough suburban retail market. He adds: “Boosted connection and diverse retail services, consisting of life-style and dining options, have boosted suburban allure, attracting reputed abroad F&B brands. 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.”


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