Chart of the Day: Glitzy Orchard Road losing glam as vacancy rates rocket to 7.8%

Retailers starting to flock elsewhere.

Window shopping at Orchard Road may not be what it used to as empty displays start to proliferate across the shopping district, no thanks to the supply hike in Orchard Gateway and the 140,000 sq ft drop in occupied retail space.

According to Savills, Singapore’s shopping belt on Orchard Road remains the focal point for new brands as well as names looking for stronger branding.

Here's more from Savills:

In Q1/2014, we saw retailers such as Sandro, Dior Backstage Studio and Alice & Olivia setting up their first stores in Singapore at Ion Orchard, with the latter being its first flagship store in Southeast Asia.

Miss Paris & Dandy House also set up its first Singapore store at Ngee Ann City, while Oasis opened its first 1,500-sq ft standalone flagship store at
Wisma Atria.

Vacancy rates on Orchard Road rose from 4.5% to 7.8% quarter-on-quarter in Q1/2014. This is largely due to the combined effect of the increase in supply from Orchard Gateway and a decline in occupied retail space by almost 140,000 sq ft.

However, the vacancy rate does not take into account the new mall’s pre-committed occupancy rate of 97.4% or about 133,000 sq ft of net lettable area. With the addition of these occupied units, vacant stock for Orchard Road will be less than 452,000 sq ft, slightly higher than the past three years’ quarterly average of 424,000 sq ft.

This also means that retail space on Orchard Road is still in healthy demand and suitable space for new retailers may be limited.