Tourist arrivals to grow at 5.2% CAGR over 2011-2015

Find out what it can do to Orchard rentals.

Maybank Kim Eng forecasts tourist arrivals to grow at a CAGR of 5.2% over 2011-2015, reaching 16.2m arrivals by 2015 (14.2m in FY12).

Here's more from Maybank Kim Eng:

In our view, higher tourist arrivals will provide some form of price support for Orchard rentals, especially since there is no more known supply after 2013. We believe that Orchard retail demand will grow at a CAGR of 2.7%, outstripping overall supply increases (CAGR: 2.3%) for 2011-2015.

This will cause vacancy rates to dip from 5.4% in 2011 to 4.2% in 2015. We also expect Orchard rentals to register growth of 0-2.5% pa in 2012-2015, as previous concerns over a supply overhang are removed. Thus, NPI yields are likely to remain steady at 5.0-5.2%.