Retail rents extends losing streak, down 1.2%

Rents have been on a downtrend for nine quarters already.

Rental costs for retail spaces in Singapore continued its downtrend in the past quarter.

According to JLL, after posting a decline for eight consecutive quarters, retail space rents moderated in 2Q17, falling by only 1.2% as compared to the decrease of 2.9% in the previous quarter.

The easing could be attributed to an improvement in retail sales and tourist arrivals, as well as an increasing number of pop-up stores being converted to permanent stores.

To recall, retail sales showed an improvement for the first 4 months of 2017, with an increase of 3.5%. Tourism arrivals also rose by 4.4% over the same period, with China being the top revenue generating market.

The foray of new retail players into Orchard and suburban areas have also helped to cushion the fall of retail rents, albeit at the expense of fringe locations. The fringe areas posted the highest vacancy rate of 8.4% among all regions, after two consecutive quarters of space contraction.

During the quarter, the Don Quijote Group announced that they will base their first SE Asian store in Orchard Road, while Apple store has officially opened at Knightsbridge Mall. Retailers are trying to feature more products and services within a shop. One example is SRPS, a new multi-concept space for dining, shopping and art, which has opened in Orchard Central.