It's not all gloom for Singapore's retail sector

Singapore is world's second most preferred destination for new brands.

A latest study by CBRE have shown that Singapore was the the second hottest market in 2015, with 63 new brands opening there. Asia dominates the top 10 rankings, accounting for four of the top five most attractive markets.

Hong Kong is in the first place with 73 new brands. Singapore is followed by Tokyo (57), Taipei (47), Moscow (40), London (39), Dubai (38), Beijing (37), Bucharest (35) and Doha (29).

CBRE notes that despite retail markets in Hong Kong and Singapore being under significant pressure from strong headwinds, both cities welcomed more new entrants than in 2014. The sharp rental correction in Tier 1 streets in Hong Kong has created more expansion opportunities for mid-range fashion and accessories brands, while retailers are gaining upper hand in lease negotiations in Singapore as well. In addition to that, landlords are keen to introduce more new players to refresh their tenant mix, as part of their asset enhancement or re-positioning initiatives.

Notable examples include Harbour City in Hong Kong and The Shoppes at Marina Bay Sands in Singapore.
However, the challenging environment – including the slowdown in retail sales and tourist spending – has currently propelled some retailers to rationalise their store network or withdraw from the market, said CBRE.

Nevertheless, it noted that Hong Kong, Singapore and Tokyo remain attractive markets as the gateway to Asia and strong consumption demand.

In terms of percentage of international retailer presence, Singapore is fifth most penetrated at 46%. Ahead are London, Dubai, Shanghai, and New York.

Outlook
According to CBRE while in the past, emerging markets have led cross-border retailer expansion, we are now seeing new brands increasingly targeting tried and tested locations.

"To gain a ‘stamp of approval’ for their brand they ‘need’ to have a store in major cities such as London, Paris, Singapore and Hong Kong. In recent years APAC markets have risen up the ranks of top target markets in providing significant opportunities for expansion, and this is particularly true for 2015," it said.

CBRE added that as economic climates in the East start to experience oncoming headwinds, retailers will look to new markets to expand their store networks and capitalise on prevailing economies and more emerging markets such as those in Africa and Latin America, with an affluent middle class population and high purchasing power. Furthermore, as investment into online platforms increases, more scrutiny will be placed on store portfolios and ensuring that retailers have the right mix of locations.