Singapore’s retail market registers second consecutive growth year as rents increase 0.5% y-o-y in 2024
The down trend in the island wide retail vacancy pace, which slid for the third sequent quarter, underpinned durable occupant interest in the middle of a modest supply of retail room this year, says Phua.
On the other hand, list prices dipped 1.3% q-o-q in 4Q2024, close to eliminating the quarterly increase of 1.7% that was reported in 3Q2024. Nevertheless, retail prices ended 2024 with an increase of 1.0% y-o-y compared to the 1.2% y-o-y increase marked in 2023.
The most recent data indicates that retail rentals increased 0.6% q-o-q in 4Q2024, establishing on the quarterly rise of 0.3% documented in 3Q2024.
She adds that brand-new interest for retail area was led by the entry of new-to-market labels and the development of occurring brands such as F&B, active lifestyle and sports, fashion companies, as well as beauty and wellness products.
On the other hand, Leonard Tay, head of research at Knight Frank Singapore, believes that the relatively strong Singapore dollar and inflationary price stress might spur many citizens to redirect their retail costs offshore. “Prime retail rental growth for 2025 is expected to relieve and stabilise within a predicted range of in between 1% and 3%,” he says.
Nava Grove MCL Land & Sinarmas Land
Rental growth in Singapore’s retail real estate market listed an annual surge of 0.5% for the entire of 2024, according to realty statistics published by URA on Jan 24. This marks the 2nd consecutive year that the local retail market has found leas grow, after raising 0.4% y-o-y in 2023.
Angelia Phua, consulting supervisor of research and consultancy, Singapore, at JLL, claims that the most recent rentals and price statistics indicate that the healing in the more comprehensive retail real property sector is mainly on the right track in spite of continuous economic obstacles such as usage leakage, the dampening impacts of price rising cost of living on intake and price pressures dealt with by retail drivers.
Wong mentions that openings rates in the OCR increased slightly to 4.3% in 4Q2024, ascend from 4.2% in 4Q2023 yet still lesser the pre-pandemic 6.2% in 4Q2019, which mirrors a resilient suburban retail market. He adds: “Improved connection and diverse retail products, including lifestyle and dining choices, have boosted suburban charm, bring in reputed overseas F&B companies. 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 areas in the Central Area have seen an uptick in demand. Net retail demand in the Outside Central Area (OCR) was 560,000 sq ft past year, around 4 times the 129,000 sq ft absorbed in 2023.
For instance, French sports brand name Salomon opened channels at Ngee Ann City and Orchard Central, while Finnish lifestyle company Marimekko opened its 2nd site at Ngee Ann City after its 2023 launch at ION Orchard.
Looking in advance, the island-wide retail vacancy level is expected to continue to be tight this year, which ought to support rental growth for prime retail places, states Phua. She adds that the marketplace will be buoyed by continual domestic usage, a tighter labour market, and a favorable tourism expectation in 2025.
” Retailers continue to incorporate experiential elements right into their bricks-and-mortar establishments, to enhance the shopping experience and drive client activity. Zara and Levi’s reopened at ION Orchard in 2024, with Zara introducing express in-store pick-up and Levi’s revealed its initial Tailor Shop,” states Wong Xian Yang, head of study Singapore & SEA at Cushman & Wakefield.
“Rental fee growth possibility, however, could be regulated by intake leak emerging from outgoing travel and the strength of the Singapore money, as well as sellers’ level of sensitivity to rent out hikes among a tough and uncertain operating environment,” says Phua. Based Upon JLL Research’s retail asset profile, she expects rents for prime floor room of investment-grade retail assets to continue expanding by 1.5 to 2.5% y-o-y in 2025.
In addition, the island-wide openings level in the retail property market slipped 0.3% q-o-q to 6.2% in 4Q2024. This was mainly driven by declines in the vacancy rates in the Central Region (falling 0.4% q-o-q to 7.2%) and Outside Central Region (falling 0.3% q-o-q to 4.3%) last quarter.
Net retail interest in the Outside Central Region reached 560,000 sq ft in 2024, over 4 times the 129,000 sq ft in 2023, while net supply completed 603,000 sq ft.
