Prime retail rents up 3.8% in Q1

City fringe retail fueled rental growth.

Prime retail rents across Singapore went up 3.8% YoY in the second quarter as the segment stays resilient, according to Knight Frank.

Knight Frank data showed the average gross rents of prime retail space hit $27.40 per square foot per month in the second quarter, up 0.9% from the first quarter.

For the first half, the average rents for premium retail space went up 1.5% as the post-pandemic rebound was masked by high operating costs due to inflation. 

Retail space in the city fringe was the major driver of rental growth last quarter with a 1.3% QoQ uptick, followed by suburban malls at 1.2%. 

Prime retail rents in the Marina Centre-Bugis area also rose 1% QoQ while rental growth in Ochard grew the slowest at 0.6%.

Knight Frank said prime retail rents remain on track to grow by 2% to 4% for the whole of 2024, mainly because the city-state continues to attract international retailers and even brands and food chains that are new to Singapore.

“[Rental] growth will be measured and likely at a slower pace for the rest of 2024. As it stands, rising rents and operating costs have begun to deter some retailers from expansions, and might soon threaten to compel others into consolidation instead,” it noted.