Retail property sales fell 2.3% in Q1: study

The sales decline in optical goods & books and food retailers dragged it down.

Retail property sales index (excluding motor vehicles) dipped at a faster rate in Q1 by 2.3% YoY, as compared to the 0.4% contraction in Q4 2018, as sales in most segments dropped in March, according to a study by Edmund Tie & Co.

Optical goods & books, food retailers, and computer and telecommunications equipment are amongst the worst performers as it declined 4.9% to 6.4% YoY. Only sectors including medical goods and toiletries saw some modest gains.

“Based on the recent business expectations of the services sector for the period of April to September 2019, the outlook for retail trade and food and beverage (F&B) segments are less optimistic, especially so for department stores and supermarket industries,” ET&Co said in the report.

Island-wide net absorption plunged more than 98% QoQ to just 5,000 sqft in Q1. Likewise, net supply dropped 78% QoQ as there were lesser completions during the quarter.

Occupancy rates in Orchard/Scotts Road slipped by 1ppt to 93.9% after several brands closed their operations in Q1, which includes Pablo Cheese Tart (Wisma Atria) and Chili’s (Tanglin Mall).

Net absorption in other city areas contracted by 16,000 sqft in Q1 from 102,000 sqft in Q4 2018.

Meanwhile, vacancy rates in the downtown and Singapore River areas remained above double digits at 10.2% and 13.6% respectively.

In addition, the occupancy rates in the suburban areas went down marginally on the back of slower net demand and supply for retail spaces.

ET&Co also noted the biggest retail transaction in Q1 totalling $630m. This comprised the sale of Liang Court to CapitaLand and City Developments for $400m or $894 psf NLA and Rivervale Mall to SC Capital Partners for $230m or $2,833 psf NLA.