Singapore’s retail market registers second consecutive growth year as rents increase 0.5% y-o-y in 2024
Rental growth in Singapore’s retail property market registered an annual increase of 0.5% for the whole of 2024, according to property statistics published by URA on Jan 24. This notes the 2nd consecutive year that the regional retail market has actually seen rents grow, after raising 0.4% y-o-y in 2023.
Looking in advance, the island-wide retail vacancy rate is expected to remain tight this year, which ought to support rental development for prime retail spaces, states Phua. She includes that the marketplace will be buoyed by sustained domestic intake, a tighter labour market, and a favorable tourism outlook in 2025.
” Sellers continue to integrate experiential components into their bricks-and-mortar establishments, to boost the purchasing experience and drive consumer involvement. Zara and Levi’s resumed at ION Orchard in 2024, with Zara releasing express in-store pick-up and Levi’s unveiled its very first Tailor Store,” claims Wong Xian Yang, head of study Singapore & SEA at Cushman & Wakefield.
On the other hand, market prices dipped 1.3% q-o-q in 4Q2024, almost eliminating the quarterly raise of 1.7% that was reported in 3Q2024. However, retail prices finished 2024 with a rise of 1.0% y-o-y contrasted to the 1.2% y-o-y surge notched in 2023.
Wong mentions that vacancy rates in the OCR climbed somewhat to 4.3% in 4Q2024, ascend from 4.2% in 4Q2023 but still below the pre-pandemic 6.2% in 4Q2019, that reflects a resilient suburban retail market. He adds: “Enhanced connection and assorted retail products, including lifestyle and eating options, have improved country appeal, drawing in reputed overseas F&B brands. Japan’s Warabimochi Kamakura and Hong Kong’s Ging Sun Ho King of Bun have debuted at One Holland Village and Tampines Mall, respectively.”
Angelia Phua, consulting director of research and consultancy, Singapore, at JLL, claims that the most up to date rental and price statistics indicate that the healing in the more comprehensive retail property sector is mainly on course in spite of ongoing economic challenges such as consumption leakage, the dampening effects of cost rising cost of living on consumption and expense tensions dealt with by retail operators.
Furthermore, the island-wide vacancy rate in the retail real estate market slipped 0.3% q-o-q to 6.2% in 4Q2024. This was mainly steered by decreases in the vacancy rates in the Central Area (falling 0.4% q-o-q to 7.2%) and Outside Central Region (slipping 0.3% q-o-q to 4.3%) previous quarter.
Net retail necessity in the Outside Central Region got to 560,000 sq ft in 2024, over four times the 129,000 sq ft in 2023, while net supply totalled 603,000 sq ft.
She adds that brand-new interest for retail space was headed by the entry of new-to-market companies and the expansion of existing brands such as F&B, active lifestyle and sports, fashion labels, along with beauty and wellness labels.
“Rental fee development ability, however, could be regulated by intake leakage arising from outbound travel and the durability of the Singapore dollar, in addition to stores’ sensitivity to lease hikes among a difficult and unsure operating atmosphere,” claims Phua. Based Upon JLL Study’s retail asset profile, she expects rental fees for prime floor room of investment-grade retail assets to proceed expanding by 1.5 to 2.5% y-o-y in 2025.
For example, French sports brand name Salomon opened up outlets at Ngee Ann City and Orchard Central, while Finnish lifestyle brand name Marimekko opened its second site at Ngee Ann City after its 2023 released at ION Orchard.
On the other hand, Leonard Tay, head of study at Knight Frank Singapore, says that the fairly solid Singapore money and inflationary price pressures could stimulate lots of residents to redirect their retail costs overseas. “Prime retail rental growth for 2025 is anticipated to ease and stabilise within a forecasted range of between 1% and 3%,” he claims.
Not just prime retail rooms in the Central Region have actually viewed an uptick in demand. Net retail need in the Outside Central Region (OCR) was 560,000 sq ft past year, around 4 times the 129,000 sq ft taken up in 2023.
The descending trend in the island wide retail vacancy rate, which slipped for the third successive quarter, underpinned resistant occupant demand amid a moderate supply of retail space this year, states Phua.
The most up to date information suggests that retail rentals raised 0.6% q-o-q in 4Q2024, building on the quarterly rise of 0.3% recorded in 3Q2024.
