Prime retail rents to see further recovery in 2023, with Orchard Road leading the way
Lam Chern Woon, head of research and consulting at Edmund Tie, expects a better year forward for the retail real estate market, helped by the proceeded recovery in the tourist market. “With the bulk of the supply pipeline slated to find onstream in 2023, consisting of The Woodleigh Mall, and retail shops at One Holland Village, Guoco Midtown and IOI Central, the supply-demand aspects are anticipated to be adjusted this year,” he includes.
A separate statement by Edmund Tie Research also emphasize information better pointing to the fortifying of interest for retail spaces in the Orchard location. Based upon retail possessions tracked by the consultancy, prime first-storey retail location on Orchard as well as Scotts Road observed the strongest rental development of 7.4% for the entire of 2022 to $39.20 psf per month. In the fringe and suburbs, rentals grew by 6.7% in 2022 to $33.10 psf per month, while in other city locations, it expanded by 3.7% to $19.20 psf per month, based on Edmund Tie’s files.
Edmund Tie’s record in addition mentions that in 3Q2022, islandwide final absorption for retail places clocked in at 323,000 sq ft, a four-fold rise from the 86,000 sq ft signed up the prior quarter, signalling enhancing necessity.
The recovery of the Singapore retail industry market gained force in the latter half of last year, regards to social distancing actions being calmed and also boundaries resuming. “The retail industry endured and has actually withstood an incredibly tough period of unparalleled difficulty, just commencing to acquire grip from the clearing of measures from 2Q2022 ahead,” remarks Ethan Hsu, Knight Frank Singapore’s head of retail.
According to records put together by Knight Frank Research, prime market leas island-wide climbed 1.7% q-o-q in 4Q2022 to reach around $26.10 psf per month. This delivers full-year prime retail leasing development to 2.6% for 2022.
The consultancy is predicting prime first-storey retail rentals in Orchard and Scotts Roadway to maintain its progression of between 7% and 9% in 2023, whilst rentals in another retail sub-markets are expected to develop between 3% and 6%.
Knight Frank’s Hsu is also predicting prime retail rents to carry on expanding this year, noting that the retail market is “in a better placement right now”, also taking into account the rise in the Goods and Services Tax (GST) and also a much more low-key economic outlook. “So long as there are no measurements restricts to events along with quarantine requirements for cross boundary returns, prime rentals of retail space are likely to expand between 3% and 5% for all of the of 2023, with the prime shopping belt Orchard Road leading the rehabilitation,” he forecasts.
In its 4Q2022 retail statement, Knight Frank notes that prime retail rooms in the Orchard Road area led the way in relations to lease progress, charting an increase of 3.1% y-o-y in 4Q2022 to $29.10 psf each month, followed by prime retail room in the Marina Centre, City Hall and Bugis sub-market which signed up a growth of 2.6% y-o-y to $23.90 psf per month. The increase in rentals was maintained by a rise in international traveler landings, as well as the return of workers came back to the office.
