Chart of the Day: Check out the accelerating decline in retail space rents

Rents in Orchard Road contracted 0.9% to $39.86 psf.

The retail space market has been facing accelerated rate of declines in rents during the past quarter after slowing down in 2Q16.

According to Colliers International, the average monthly gross rent for prime ground floor shopping mall space in the Orchard Road sub-market contracted by 0.9% QOQ from $40.21 per sq ft to $39.86 per sq ft. This is faster than the 0.5% QOQ slide in Q2 2016. Likewise, the rate of rental decline picked up pace in the Regional Centres. The average monthly gross rent for prime ground floor shopping mall space reached $33.38 per sq ft, after falling by 0.8% QOQ in Q3 2016. In comparison, rents fell by 0.3% QOQ in Q2 2016.

This came as Urban Redevelopment Authority’s Real Estate Information System released the total number of leasing deals as of October 18. The figures revealed that there were a total of 2,460 leasing deals in Q3 2016, down 12.5% QoQ and 14.7% YOY. This was a sharp contrast to the 41.4% QOQ jump in leasing volume in Q2 2016.

"The fall in leasing transactions in Q3 2016 reflected the weak sentiment in the retail sector which continued to face numerous challenges including Singapore’s weak economy, cost concerns, manpower shortages and intensifying competition from online retailers," Colliers International said.