Orchard retail rents to grow 3%-5% in 2024: Savills

Tourist arrivals and spending will drive the growth in rents.

Retail rents in Orchard Road will likely grow between 3%-5% in 2024 due to continued tourist arrivals and spending recovery.

“Continued recovery in air travel and tourism demand should support growth in Singapore’s tourism-related sectors and mainly benefit the retail sector: the shops and F&B establishments along Orchard Road and the CBD,” Savills reported.

Savills added that there has been an increase in overseas brands across sectors such as retail, F&B, wellness and fitness actively seeking prime locations in Singapore to build their regional presence, which could “well support rents, especially in Orchard and the CBD.”

Savills estimates more than 3.4 million sq ft of retail space to come online in the next four years, from 2024 to 2027, averaging 872,000 sq ft of new retail space per year, double the annual average supply of 478,000 sq ft from the last five years (2019 to 2023).

Unlike Orchard, Savills expect retail rents in the suburb to be “flat” in 2024 as “cost-push inflation is offset by weaker domestic spending due to outbound travel and weak real wage growth.”