Chart of the Day: Check out the prime retail rental gap in Orchard Road, Regional Centre

Orchard Road rents dipped 1.3%.

According to Colliers International, as of the end of March 2013, the monthly prime ground floor gross rents in Orchard Road fell by 1.3 per cent from the previous quarter to S$36.75 per sq ft.

In the Regional Centres, the average monthly gross rent of prime space fell by 0.1 per cent from 4Q 2012 to S$33.88 per sq ft.

Given that the Regional Centres have established a firm presence among its residential catchment population, coupled with increased competition among Orchard Road malls, the rental premium that prime retail space in Orchard Road commands over similar space in the Regional Centres narrowed further from 11.5 per cent as of end-2012 to 10.1 per cent in 1Q 2013.

Here's more from Colliers International:

Mr Calvin Yeo, Deputy Managing Director, Client Services, says, “Despite the cautious consumer sentiments, the leasing market continued to enjoy a consistent momentum of new openings and entrants of both shop and food and beverage (F&B) outlets in 1Q 2013.

Overall vacancy rates remained low with many of the popular Orchard Road and sub-urban malls being able to replace outgoing tenants. It was observed that although trading conditions are challenging, various retailers are still keen to attempt new concepts, as well as to embark on expansion plans in locations where they do not have a presence.”

For instance, in 1Q 2013, the luxury watch house, Philip Stein, as well as the American furniture and household chain, Crate & Barrel, opened their first Singapore outlets in ION Orchard.

Over in the sub-urban malls, French label, Agnes b., opened its first outlet store at IMM. F&B outlets also made their debut at retail malls, such as the Hong Kong dim sum chain, Tim Ho Wan, which opened its first overseas outpost in the new atrium wing of Plaza Singapura.

Mr Yeo continues, “Going forward, we expect heightened competition among shopping malls for tenants, as well as among retailers for preferred vibrant locations to compete for the consumer dollar.

Such competition would result in older malls facing pressure to re-invent, so as to stay relevant and prevent increasing vacancies and falling rents.”

For instance, Shaw Centre located in Orchard Road will undergo its largest transformation in almost 30 years, repositioning itself as a contemporary shopping mall, while Eastpoint Mall, the main sub-urban shopping centre of Simei house estate for the past 16 years, has commenced a major makeover.