Rents on Orchard Road to stay flat in 2012

Prime suburban rents are also expected to hold firm.

According to Savills Retail sector briefing, shoppers become more afl uent and well-travelled, buying preferences could skew towards high-quality purchases and value-for-money merchandise. Demand from luxury labels, and fast-fashion and high-street brands, is therefore expected to stay healthy. Notwithstanding the continuing healthy demand situation, rents on Orchard Road are projected to stay flat as the outlook within the eurozone remains overcast.

Prime suburban rents have been resilient during the last downturn, slipping by less than 3% between the peak in Q3/2008 and the trough in Q2/2009. Besides having a stable l ow of pedestrian traffic, suburban malls also benefit from a more flexible tenant mix and can cater to trades such as DIY, electronics or outlet stores. In the more densely populated areas, some landlords are seen to have upped their asking rents. With the Singapore economy projected to stay in positive territory, we expect prime suburban rents to hold firm in 2012.