Singaporeans seen to spend more on consumer goods, rent in 2011

Jones Lang LaSalle said the 6% y-o-y increase in retail sales in July 2010 and the 18% y-o-y increase in tourism arrivals indicate renewed consumer confidence and growth for retailers in the next 12 months.

In a statement, the real estate services firm said that Singapore’s retail sales index has been trending upward since Q209, with sales of watches and jewelry, medical goods and toiletries, apparel and footwear recording the highest growth of between 10.5% and 16.9% y-o-y. The country also saw a deluge of visitor arrivals, reaching 996,000 in August.

Jones Lang La Salle said all signs point to the prime retail market in Singapore growing in both rental values and capital values over the next 12 months as it continues moving to the upturn phase of the rental cycle.

“In line with a stable local and regional economic outlook and tighter rental confidence, rentals for the primary, secondary and suburban shopping areas are expected to remain stable with some marginal upside. Vacancies are likely to stabilise as the market finds its equilibrium one year on from the large addition of supply along Orchard Road,” it said.

Chris Fossick, Managing Director Singapore and South East Asia said, “South East Asia economies are expected to expand between 4-8% on average. Backed by relatively young populations particularly in Vietnam and Indonesia, this should bode well for occupiers and investors in the retail markets in the long term.

“In the first nine months of 2010 we have seen the proportion of cross border investments across Asia Pacific rising to over 30% of total commercial investments, compared to only 25% in the entire year of 2009. We expect this healthy momentum domestic and cross border investments will continue into 2011,” Fossick added.