Orchard Road rents slide for the sixth straight quarter with 1.1% drop in Q2

Rents slipped to $32.5 psf per month.

Tenants have the upper hand in Orchard Road, where landlords were forced to cut rents for the sixth consecutive quarter as sales fall and restructuring woes continue to bite.

Average prime retail rents in Orchard Road as tracked by CBRE Research stand at $32.50 psf/mth currently, down 1.1 per cent from the first quarter of 2016.

“Our research shows a clear reduction of rentals and it would not be accurate to report otherwise, as the retail sector is still undergoing restructuring and is currently an occupiers’ market,” said Desmond Sim, Head of Research, Singapore & South East Asia, CBRE.

Meanwhile, average prime rent for the Suburban submarket fell 0.7 per cent to $29.45 psf/mth from the first quarter of 2016. This sub-market is relatively more resilient as prime suburban rents only began to fall in the last quarter of 2015, CBRE said.

“Rents have certainly remained under pressure but there are still sparks of activity, particularly around well-located and well-managed suburban malls that have a strong positioning tilted towards families and the immediate catchment such as Compass One, which recently reported 90 per cent precommitment,” Sim noted.