Prime retail rents islandwide up 0.9% in 2Q2024: Knight Frank
Singapore’s total retail sales (omitting motor vehicles) dropped from $3.5 billion in March to $3.3 billion in April, in tandem with the lower foreigner arrivals. Nonetheless, May saw a revive to $3.6 billion, driven by food items and liquor expenditures. Retail action turns up to have actually readjusted to sustainable ranks in 2Q2024, mirroring the concert-heavy months in 1Q2024, notes Ethan Hsu, Knight Frank’s head of retail.
The standard prime retail rents islandwide grew by 0.9% q-o-q and 3.8% y-o-y to reach $27.40 psf per month (psf pm) in 2Q2024, according to a July Knight Frank retail report. The development occurs in spite of reduced traveler arrivals complying with a temporary boom as a result of prominent concerts in the initial quarter of the year.
Since 1H2024, prime leas islandwide have grown 1.5%, assisted by the post-pandemic regeneration and new launchings by local and international brand names. This consists of British footwear seller Hunter that launched its first store in Singapore at Plaza Singapura and French sports apparel company Hoka’s beginning in Ion Orchard. The F&B market was joined by newcomers Ipoh Town, a Malaysian traditional coffee shop at Jewel Changi International Airport; and Kebuke, a Taiwanese bubble tea establishment at Taste Orchard.
Whilst the retail industry field in Singapore continues to be appealing to retailers, Hsu notes that inflation and a solid Singapore dollar have tempered development as retailers deal with ascending operating costs.
Amidst this unpredictable atmosphere, Hsu thinks prime retail rental progression will likely be sluggish for the rest of the year, as increasing prices can likely prevent expansion by retailers and force consolidation as an alternative. Nevertheless, he thinks leas are still on course to grow in between 2% and 4% for the entire year, unchanged from his earlier projections.
Knight Frank specifies top retail locations as rental-yielding units of 350 to 1,500 sq ft with the best frontage, connectivity, footfall and accessibility in a shopping mall, for instance, ground- or basement-floor retail shopping center units connected to an MRT terminal or bus interchange.
While Taylor Swift and Coldplay concert-goers enhanced visitors to a point of almost 1.5 million in March, visitor arrivals stabilised last quarter, with 1.4 million guests documented in April and 1.3 million tourists documented in May and June specifically.
Prime retail sectors in the city-fringe viewed the top rental improvement in 2Q2024, climbing 1.3% q-o-q to $23.70 psf pm. Prime rental fees in suburbs went up 1.2% q-o-q to $26.50 psf pm, followed by the Marina Centre, City Hall and Bugis area (up 1% q-o-q to $25.50 psf pm) and the Orchard part (up 0.6% q-o-q to $30.70 psf pm).
Data from the Accountancy and Corporate Regulatory Authority reveal that retail and F&B company cessations totalled 2,631 in 2Q2024, surpassing the 2,502 services created throughout the same period. This is a reverse from the last quarter when there was a net boost of 295 brand-new retail and F&B ventures.
