What retail landlords are doing to spice up prime rents

They are changing tenant mix.

The past quarter has seen a slight sequential improvement in retail rents of prime, ground floor spaces in prominent shopping malls along Orchard Road and in the Regional Centres.

According to a report released by Colliers International Research, this is due to new tenants and reconfiguration of retail spaces in such areas. Data from the research house shows a 0.9% QoQ increase in average monthly gross retail rent for the prime ground floor shopping mall space in the Orchard Road micro-market from $39.86 in 3Q16 to $40.22 in 4Q16.

In Regional Centres, retail rents remained relatively stable in the past quarter as rents increased slightly by 0.4% QoQ to $33.53.

"We observed some landlords changing tenant mix, such as including jewellery shops which typically command higher rents," Colliers noted.

It added,"Also, larger retail spaces originally occupied by a single tenant were carved out into smaller spaces for multiple tenants at higher rents."

For the full year, rents in Orchard Road fell by 1.1%, milder than the 2.6% decline in 2015. In Regional Centre, rents fell 1.2%, compared to a rise of 0.3% in 2015.