Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
The commonly inactive rents comply with mixed retail sales productivity in 1Q2024. While information from the Singapore Department of Statistics showed retail sales omitting car rebounding from a year-end depression to strike $4 billion in January on the back of Chinese New Year events, it ultimately fell to $3.2 billion in February prior to moving back up to $4.2 billion in March.
Simultaneously, the F&B situation has actually seen an accelerated speed of restaurants setting up and shutting down, adds in the Knight Frank statement. In 1Q2025, F&B brands consisting of Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their shops, whilst hotpot chain Haidilao closed two outlets.
Offered the persistent high-cost atmosphere and the significantly competitive F&B scene, the outlook for the retail remains challenging, states Knight Frank. In addition, sweeping tariffs introduced by US President Donald Trump might pull down business position. “For a small trading country like Singapore, this may have significant impacts that might weaken [Knight Frank’s] delicate 1% to 3% growth foresight of prime retail rental fees in 2025,” claims Hsu.
Singapore prime retail rents remained mostly flat in 1Q2025 amid a retail setting that continues to encounter increasing operating costs and labor restraints, claims Knight Frank Singapore. According to a research record published by the company in April, prime retail rents in Orchard equated at $31.20 psf per month (pm) last quarter, inching up just 0.4% q-o-q.
Potential measures include restricting the number of F&B permits issued within a particular place, capping the portion of net lettable location designated for F&B in a mall to a stakeholder-reviewed ratio, or imposing a tax on F&B chains that increase past a certain number of avenues within a designated period. “These can all serve as a call for F&B operators not to bite off more than they can eat and expand the development of F&B to an extra acceptable and lasting pace,” adds Hsu.
The fast entries and exits of F&B brands might point to an indicator of over growing and the need for intervention to secure the marketplace, claims Knight Frank. “The dining scene seems reaching oversupplied values, and measures to cool down the marketplace for a lasting industry might be required earlier instead of later,” states Ethan Hsu, head of retail at Knight Frank Singapore.
Pointing out data from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank observes that a total amount of 3,047 F&B businesses closed down in 2024– the top figure since 2005. On the other hand, 3,793 F&B businesses were formed the same year, the second-highest figure since 3,934 beginnings in 2021.
Prime retail spaces in the Marina Centre, City Hall and Bugis spots equated at $26.40 psf pm in 1Q2025, up 0.6%, whilst city-fringe prime retail rents decreased 0.3% q-o-q to $24 psf pm. Suburban prime retail rentals evened out $26.80 psf pm, up 0.3% q-o-q.
