Orchard Road losing lustre as retail headwinds escalate

Rents slipped further in Q1.

Orchard Road's appeal has been dampened by escalating retail headwinds, with rents and capital values posting declines in the first quarter.

Data from Colliers show that retail rents at Orchard Road fell by 0.9% in Q1, following a 0.2% decline in the preceding quarter.

Colliers noted that retailers and food and beverage (F&B) operators on Orchard Road are becoming increasingly cautious towards expansion plans and are developing an unrelenting resistance towards rental increases due to rising operating costs, disappointing visitor arrivals and weak retail sales.

On the back of declining transaction volume, alongside waning investor interest, the average capital values for prime Orchard Road strata-titled retail space dipped by 2 per cent QoQ to S$6,803 per sq ft in 1Q 2015 – after staying unchanged for 7 quarters since 2Q 2013.