Islandwide private retail vacancy rate hits 10-year low

Vacancy rate fell to 6.6% in 1Q24.

The islandwide vacancy rate for private retail space fell to its lowest in 10 years since 4Q14, reaching 6.6% in 1Q24.

Sub-markets like the Orchard Area witnessed a 2.3 percentage point drop in vacancy rate, reaching 6.4%, driven by increased demand for retail spaces on Orchard Road.

The Suburban Area experienced the opposite, with the vacancy rate rising to 4.4% in 1Q24 as more people returned to the office and travelled overseas.

"As tourism extends its recovery, popular tourist destinations such as the Orchard Area will see further rental growth," Savills said.

Rents in the Orchard Area have increased 0.7% QoQ to $22.80 psf.

For the rest of the year, Savills expects strong interest and rental growth in prime retail space, projecting an increase of 3% YoY to 5% YoY in average rents in the Orchard Area.