Singapore’s retail market registers second consecutive growth year as rents increase 0.5% y-o-y in 2024
Angelia Phua, consulting supervisor of research study and consultancy, Singapore, at JLL, says that the most recent rental and rate data suggest that the healing in the more comprehensive retail real property sector is greatly on course despite ongoing financial obstacles such as intake leakage, the dampening effects of cost rising cost of living on intake and cost tensions dealt with by retail operators.
Looking ahead, the island-wide retail vacancy rate is anticipated to continue to be limited this year, which should sustain rental growth for prime retail places, says Phua. She adds that the market is going to be buoyed by continual domestic usage, a tighter labour market, and a positive tourism overview in 2025.
In addition, the island-wide openings rate in the retail real estate market slid 0.3% q-o-q to 6.2% in 4Q2024. This was mostly driven by declines in the vacancy rates in the Central Area (dropping 0.4% q-o-q to 7.2%) and Outside Central Region (falling 0.3% q-o-q to 4.3%) last quarter.
She includes that new demand for retail area was pioneered by the entrance of new-to-market companies and the growth of existing companies such as F&B, active lifestyle and sports, fashion companies, in addition to beauty and wellness labels.
The downward pattern in the island wide retail vacancy rate, which slid for the 3rd consecutive quarter, underpinned durable occupant demand in the middle of a modest supply of retail space this year, claims Phua.
Lumina Grand Bukit Batok West Avenue 5
The most up to date data indicates that retail rents improved 0.6% q-o-q in 4Q2024, building on the quarterly increase of 0.3% recorded in 3Q2024.
“Rental fee development ability, however, could be regulated by usage leak emerging from outbound travel and the durability of the Singapore dollar, as well as retailers’ level of sensitivity to lease hikes amidst a difficult and uncertain operating setting,” says Phua. Based Upon JLL Study’s retail property profile, she expects leas for prime flooring room of investment-grade retail assets to continue expanding by 1.5 to 2.5% y-o-y in 2025.
Meanwhile, list prices dipped 1.3% q-o-q in 4Q2024, nearly erasing the quarterly rise of 1.7% that was documented in 3Q2024. Nevertheless, retail prices finished 2024 with a rise of 1.0% y-o-y compared to the 1.2% y-o-y surge notched in 2023.
Rental growth in Singapore’s retail property market listed an annual surge of 0.5% for the whole of 2024, according to real estate statistics released by URA on Jan 24. This marks the 2nd succeeding year that the regional retail market has found rental fees grow, after increasing 0.4% y-o-y in 2023.
” Stores remain to integrate experiential components into their bricks-and-mortar stores, to enhance the purchasing experience and drive consumer involvement. Zara and Levi’s resumed at ION Orchard in 2024, with Zara releasing express in-store pick-up and Levi’s revealed its very first Dressmaker Outlet,” says Wong Xian Yang, head of research Singapore & SEA at Cushman & Wakefield.
As an example, French sports brand Salomon opened up avenues at Ngee Ann City and Orchard Central, while Finnish lifestyle brand name Marimekko started its second site at Ngee Ann City after its 2023 debut at ION Orchard.
On the other hand, Leonard Tay, head of research at Knight Frank Singapore, suggests that the relatively strong Singapore money and inflationary price pressures might stimulate numerous citizens to reroute their retail costs overseas. “Prime retail rental development for 2025 is expected to ease and secure within a predicted range of between 1% and 3%,” he states.
Wong indicates that vacancy rates in the OCR climbed a little to 4.3% in 4Q2024, up from 4.2% in 4Q2023 however still below the pre-pandemic 6.2% in 4Q2019, that mirrors a tough suburban retail market. He includes: “Enhanced connection and assorted retail offerings, consisting of lifestyle and eating alternatives, have enhanced country charm, drawing in respected overseas 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.”
Net retail necessity in the Outside Central Region got to 560,000 sq ft in 2024, over four times the 129,000 sq ft in 2023, while net supply totalled 603,000 sq ft.
Not just prime retail spaces in the Central Area have actually viewed an uptick in demand. Net retail need in the Outside Main Area (OCR) was 560,000 sq ft last year, approximately 4 times the 129,000 sq ft taken up in 2023.
