Islandwide retail rents slump for the first time in two years

The retail crunch is coming to a head.

Retail vacancy rates have been creeping up for several quarters, but rents have been relatively unscathed--until now. For the first time since 3Q13, Singapore’s overall retail rents declined by 0.5% qoq in the second quarter.

According to Maybank Kim Eng, the sharp decline in occupancy is especially evident in the City Hall area, where vacancies leaped to 13.4%.

This marks a sharp increase from 11.7% in the preceding quarter. CBRE estimates that rents there slipped 1.6% QoQ and 2.6% YoY.

Even the Orchard Area was not spared. Rents in the prime shopping belt dipped 0.4% in Q2, on back of persistently soft tourist arrivals.

"The outlook for tourist-based malls -Orchard, City Hall area and Vivocity – has not improved on weak regional economies and currencies. These continued to rein in arrivals from Indonesia, Malaysia, Europe and Australia," the report said.