Chart of the Day: Island-wide vacancy rate in retail dipped to 7.7% in Q2

This was due to the increase of retail space demand in Funan and suburban areas.

This chart from Savills shows island-wide vacancy rate in retail dipped to 7.7% in Q2 from its highest level at 8.7% in Q1.

This was blamed on increase in retail space demand seen in Funan and parts of Suburban Area to 797,000 sqft in Q2, which far surpassed the total net absorption of 581,000 sqft for the last two years.

Savills also noted the vacancy level in East Region dipped to its lowest level in almost four years as the take-up in Jewel was only registered in Q2 when tenants moved into their premises in April. Owing to strong daily traffic from the residential catchment, the demand for retail space in Tampines continued to rise, supporting the good overall occupancy level in East Region.

However, demand for retail spaces softened in other parts of Suburban Area, such as Jurong Regional Centre where the vacancy rate hit a record high of 24.9%.

The other reason cited for the positive demand for retail space is landlords adjusting their rents to accommodate the persistent economic slowdown and weak consumer sentiment.