Singapore’s retail market registers second consecutive growth year as rents increase 0.5% y-o-y in 2024
The current data indicates that retail rentals improved 0.6% q-o-q in 4Q2024, building on the quarterly rise of 0.3% documented in 3Q2024.
For instance, French sports brand name Salomon opened up channels at Ngee Ann City and Orchard Central, while Finnish lifestyle brand Marimekko started its 2nd site at Ngee Ann City after its 2023 released at ION Orchard.
Net retail necessity in the Outside Central Region got to 560,000 sq ft in 2024, over 4 times the 129,000 sq ft in 2023, while net supply totalled 603,000 sq ft.
In addition, the island-wide openings level in the retail property industry slid 0.3% q-o-q to 6.2% in 4Q2024. This was mainly steered by declines in the opportunity rates in the Central Region (dropping 0.4% q-o-q to 7.2%) and Outside Central Region (slipping 0.3% q-o-q to 4.3%) previous quarter.
Angelia Phua, consulting supervisor of research study and consultancy, Singapore, at JLL, claims that the latest rental and cost statistics indicate that the recovery in the more comprehensive retail real estate sector is greatly on track regardless of continuous financial obstacles such as consumption leakage, the dampening impacts of price inflation on consumption and cost stress faced by retail operators.
The down trend in the island wide retail vacancy rate, which slipped for the third sequent quarter, underpinned durable occupier need in the middle of a modest supply of retail area this year, claims Phua.
Rental growth in Singapore’s retail property sector registered a yearly increase of 0.5% for the entire of 2024, according to realty statistics published by URA on Jan 24. This marks the second constant year that the regional retail market has observed rents increase, after increasing 0.4% y-o-y in 2023.
Wong indicates that vacancy rates in the OCR climbed slightly to 4.3% in 4Q2024, ascend from 4.2% in 4Q2023 but still below the pre-pandemic 6.2% in 4Q2019, which shows a tough suburban retail market. He adds: “Improved connection and diversified retail offerings, including life-style and eating choices, have actually improved rural charm, attracting respected abroad F&B brands. Japan’s Warabimochi Kamakura and Hong Kong’s Ging Sun Ho King of Bun have actually debuted at One Holland Village and Tampines Mall, specifically.”
” Sellers continue to incorporate experiential components into their bricks-and-mortar stores, to enhance the shopping experience and drive consumer activity. Zara and Levi’s reopened at ION Orchard in 2024, with Zara releasing express in-store pick-up and Levi’s revealed its initial Tailor Outlet,” claims Wong Xian Yang, head of research study Singapore & SEA at Cushman & Wakefield.
On the other hand, Leonard Tay, head of study at Knight Frank Singapore, says that the reasonably strong Singapore dollar and inflationary price pressures might stimulate several citizens to reroute their retail costs overseas. “Prime retail rental growth for 2025 is expected to reduce and stabilise within a predicted range of in between 1% and 3%,” he states.
On the other hand, list prices dipped 1.3% q-o-q in 4Q2024, nearly getting rid of the quarterly increase of 1.7% that was documented in 3Q2024. Nevertheless, retail prices ended 2024 with an increase of 1.0% y-o-y contrasted to the 1.2% y-o-y increase notched in 2023.
She includes that brand-new demand for retail space was headed by the access of new-to-market labels and the growth of existing companies such as F&B, active lifestyle and sports, fashion labels, along with beauty and wellness labels.
Not only prime retail spaces in the Central Region have viewed an uptick in need. Net retail interest in the Outside Central Area (OCR) was 560,000 sq ft last year, about 4 times the 129,000 sq ft absorbed in 2023.
Looking ahead, the island-wide retail vacancy level is expected to stay tight this year, which need to support rental growth for prime retail spaces, states Phua. She includes that the market will be buoyed by continual domestic consumption, a tighter labour market, and a favorable tourism expectation in 2025.
“Rental fee growth potential, however, could be moderated by intake leakage emerging from outbound travel and the power of the Singapore money, along with merchants’ sensitivity to rent hikes among a tough and unpredictable operating setting,” says Phua. Based Upon JLL Research’s retail asset profile, she anticipates rents for prime floor room of investment-grade retail assets to continue growing by 1.5 to 2.5% y-o-y in 2025.
