Rents for prime retail spaces in Singapore continued to grow in 3Q2025, albeit at a slower pace. According to a research report by Knight Frank Singapore, average gross rent for prime retail spaces island-wide edged up 0.5% q-o-q last quarter to $28.40 psf per month (psf pm). This is slower than the 1.2% q-o-q growth recorded in the prior quarter.

Gross rental growth was led by prime retail spaces in the sub-area covering Marina Centre, City Hall and Bugis, which logged 1.3% q-o-q growth to an average of $27.30 psf pm in 3Q2025. Next was the Orchard sub-area, which grew 0.4% q-o-q to $31.70 psf pm.

This was followed by suburban prime retail spaces (up 0.3% to $27 psf pm) and city fringe retail spaces (up 0.1% to $24.30 psf pm). The average gross rent of prime retail spaces has now grown 2% in the first nine months of the year.

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The varying performance across the different areas points to a “two-sided dynamic” in the retail sector, observes Knight Frank in its report. On the one hand, persistent headwinds, including growing rents and rising operating costs, have led to some retailers exiting the market.

This appears particularly prevalent in the F&B industry, with headlines in recent months announcing closures of various eateries ranging from international brands such as Eggslut and Burger & Lobster, local favourites such as Cantonese restaurant Ka-Soh and artisanal bakery Fluff Bakery, and established chains such as the Prive Group.

On the flipside, overall retail activity continued to demonstrate resilience. Data published by the Department of Statistics Singapore show that total retail sales excluding motor vehicles stood at $7.2 billion for July and August, higher than the $6.9 billion recorded across April and May.

Knight Frank partly attributes the higher sales to the disbursement of government vouchers, which helped households offset essential daily expenses and free up additional disposable income for discretionary spending. The GST voucher scheme saw eligible Singaporeans receiving up to $850 in cash in August, on top of the $600 in SG60 vouchers received in July.

In addition, Singapore’s retail scene continues to benefit from a growing inflow of travellers. International visitor arrivals totalled 3.3 million in July and August, rising from the 2.8 million visitors logged in April and May, as well as the 3.1 million visitors registered in July and August of last year. The higher figure came from both business and leisure travel, supported by Mice (meetings, incentives, conferences and exhibitions) activities and international marketing efforts.

The need to differentiate

The tailwinds have resulted in stable occupancy for prime retail space, with vacated units being swiftly absorbed, says Knight Frank. The resilient activity also extends to the F&B industry, as Singapore continues to be seen as a compelling testing ground. The firm highlights that vacated F&B spaces have been taken up by international chains that can leverage deeper financial resources.

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Notable F&B entrants last quarter include American chain Chipotle Mexican Grill, which announced it would open outlets in Singapore and South Korea next year, as well as Australian frozen yoghurt brand Yo-Chi, which opened an outlet at Orchard Central in August.

Other bright spots in the F&B industry have emerged, with local players surviving or even thriving despite the broader challenges in the sector. For example, Violet Oon Singapore, which relocated its outlet at Jewel Changi Airport to Dempsey Hill in April, recently debuted its new casual dining concept, Bibik Violet, at Temasek Shophouse on Orchard Road. Elsewhere, Japanese-style patisserie Nesuto, known for its Tras Street and Jewel stores selling delicate sweet treats, branched out with a savoury food menu at its newest cafe at Ion Orchard, which opened in August.

These developments underscore the need for retailers to successfully differentiate themselves. “To survive and stand out in Singapore's exacting retail sector, success hinges on differentiation and carving out a unique niche from the mass of lookalike offerings,” says Ethan Hsu, head of retail at Knight Frank Singapore.

The rise of online shopping has further compounded the need to stand out. According to Knight Frank, online sales, which accounted for 5% to 7% of total retail sales before the pandemic, shot up 25% during the circuit breaker. The proportion of online sales has since stabilised to around 12% to 15% post-pandemic.

Still, while e-commerce has become more ubiquitous, brick-and-mortar stores remain relevant as consumers still seek social interaction and sensory experiences, adds Hsu. This is especially true for luxury, lifestyle, dining and entertainment segments, which continue to rely on physical spaces. Shoppers also continue to be drawn to curated brand offerings and in-person experiences, which have become staples in the luxury goods and specialised services segments.

Spending across the Causeway

Beyond the duality of the retail landscape in Singapore, Knight Frank’s report notes that more Singaporeans are spending their dollars across the Causeway. Citing data from Tourism Johor, the firm notes that Singaporeans made up 12.9 million (78.1%) of visitors to Johor between January and August. This represents a 17% jump over the 11 million recorded across the same period last year.

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Separate data from UOB showed that 80% of trips to Johor by its Singapore-issued cardholders in 1H2025 were day trips, with each cardholder spending more than $100 on average. Applying that percentage and a $100 average spending amount to the 12.9 million Singaporean visitors to Johor between January and August, it is estimated that some $1 billion in consumer spending was channelled into Johor by Singapore day-trippers in the first eight months of 2025.

However, while the amount is substantial, Hsu notes that the figure makes up a relatively marginal 3.6% of Singapore’s $28.3 billion total retail sales across that period. “The shopping experiences in Singapore and Johor differ, and both markets can and will continue to maintain and develop their own respective retail positioning, strengths and niches,” he adds.

In any case, competition from Johor further supports the impetus for Singapore retailers and landlords to craft unique offerings. “Consumers will always seek variety, wanting different products and services, and will be willing to pay for what they deem to be of value to them,” says Hsu.