Chart of the Day: Rents for prime retail space in Orchard Road dipped 0.9%

What could be the reasons behind this?

According to Colliers International, as of the end of June 2013, the average monthly gross rents of prime retail space in the Regional gained a slight 0.1 per cent – from S$33.38 per sq ft in the preceding quarter to S$33.42 per sq Centres ft in 2Q 2013. 

Comparatively, the average monthly gross rents of prime retail space in Orchard Road declined by 0.9 per cent – from S$36.75 per sq ft in 1Q 2013 to S$36.42 per sq ft in 2Q 2013. 

Here's more from Colliers International:

Consequently, the rental premium that prime retail space in Orchard Road commands over similar space in the Regional Centres narrowed further from 10.1 per cent in 1Q 2013 to 9 per cent in 2Q 2013.

Mr Calvin Yeo, Deputy Managing Director at Colliers International, says, “The continued narrowing of rental gap in retail space between the Regional Centres and Orchard Road indicated that malls in the Regional Centres are gaining a firmer foothold in the retail property scene; particularly, given the immediate catchment area of the nearby neighbourhoods. 

In fact, we see many retailers from the non-luxury and fast-fashion sectors, who have typically been in Orchard Road and the more central areas, expanding into the sub-urban locations – with a view to bringing the accessibility of Orchard Road shopping into the heartlands, as well as developing decentralised commercial centres around the island.”