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

The most up to date information shows that retail rentals increased 0.6% q-o-q in 4Q2024, building on the quarterly boost of 0.3% documented in 3Q2024.

She adds that brand-new need for retail space was spearheaded by the entrance of new-to-market companies and the development of existing companies such as F&B, active lifestyle and sports, fashion labels, as well as beauty and wellness labels.

Angelia Phua, consulting supervisor of research study and consultancy, Singapore, at JLL, states that the most up to date rentals and cost statistics show that the recuperation in the broader retail real estate industry is largely on course despite ongoing economic obstacles such as intake leakage, the dampening effects of cost rising cost of living on usage and cost tensions encountered by retail drivers.

“Rent development potential, however, could be regulated by consumption leakage emerging from outbound travel and the strength of the Singapore dollar, along with retailers’ level of sensitivity to rent hikes amidst a difficult and uncertain operating environment,” claims Phua. Based Upon JLL Research’s retail possession profile, she anticipates leas for prime floor area of investment-grade retail assets to proceed growing by 1.5 to 2.5% y-o-y in 2025.

The down trend in the island wide retail vacancy rate, which slid for the third sequent quarter, underpinned durable tenant demand in the middle of a modest supply of retail room this year, says Phua.

For example, French sports brand Salomon opened channels at Ngee Ann City and Orchard Central, while Finnish lifestyle brand name Marimekko started its second shop at Ngee Ann City after its 2023 released at ION Orchard.

Additionally, the island-wide openings rate in the retail real estate industry slipped 0.3% q-o-q to 6.2% in 4Q2024. This was mostly driven by reductions in the opportunity rates in the Central Area (falling 0.4% q-o-q to 7.2%) and Outside Central Region (dropping 0.3% q-o-q to 4.3%) previous quarter.

Looking in advance, the island-wide retail openings rate is expected to stay limited this year, which ought to sustain rental growth for prime retail places, says Phua. She includes that the marketplace will be buoyed by sustained domestic intake, a tighter labour market, and a favorable tourism overview in 2025.

Rental growth in Singapore’s retail property market listed a yearly raise of 0.5% for the whole of 2024, according to property statistics released by URA on Jan 24. This notes the 2nd consecutive year that the regional retail market has actually observed rental fees grow, after increasing 0.4% y-o-y in 2023.

” Sellers continue to integrate experiential aspects right into their bricks-and-mortar shops, to boost the shopping experience and drive customer activity. Zara and Levi’s reopened at ION Orchard in 2024, with Zara launching express in-store pick-up and Levi’s revealed its first Tailor Shop,” states Wong Xian Yang, head of study Singapore & SEA at Cushman & Wakefield.

Union Square Residences floor plan

On the other hand, retail prices dipped 1.3% q-o-q in 4Q2024, close to erasing the quarterly raise of 1.7% that was reported in 3Q2024. However, retail prices finished 2024 with an increase of 1.0% y-o-y compared to the 1.2% y-o-y surge notched in 2023.

On the other hand, Leonard Tay, head of study at Knight Frank Singapore, opines that the fairly solid Singapore dollar and inflationary rate stress can stimulate numerous citizens to reroute their retail costs overseas. “Prime retail rental growth for 2025 is expected to relieve and stabilise within a predicted range of in between 1% and 3%,” he states.

Wong notes that openings rates in the OCR climbed slightly to 4.3% in 4Q2024, ascend from 4.2% in 4Q2023 but still lesser the pre-pandemic 6.2% in 4Q2019, that mirrors a resilient suburban retail market. He adds: “Boosted connection and diversified retail offerings, including lifestyle and eating options, have boosted country appeal, attracting well-known abroad F&B brands. Japan’s Warabimochi Kamakura and Hong Kong’s Ging Sun Ho King of Bun have debuted at One Holland Village and Tampines Mall, respectively.”

Not just prime retail rooms in the Central Region have actually found an uptick in demand. Net retail need in the Outside Main Area (OCR) was 560,000 sq ft last year, about four times the 129,000 sq ft consumed 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 amounted to 603,000 sq ft.


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