Retail rents in the Central Area and Fringe Area contributed to the growth, with retail rents growing by 0.7% and 0.9% q-o-q, respectively (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Retail rents in Singapore rose 0.9% q-o-q in 2Q2025, reversing the 0.5% decline recorded in 1Q2025, according to URA on July 25. CBRE Research similarly reported a 0.7% q-o-q increase in islandwide prime floor rents during the quarter, bringing growth in 1H2025 to 1.3%.
Source: URA
Rents in both the Central Area and Fringe Area contributed to the uplift, rising 0.7% and 0.9% q-o-q, respectively. “The growth in rents could be driven by tier-one retail malls, which continue to see low vacancy rates and strong footfalls,” says Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield.
Meanwhile, prices of retail space edged up 0.1% q-o-q, slowing from the stronger 1.9% growth seen in 1Q2025. Angelia Phua, consulting director of research and consultancy at JLL Singapore, notes that the market remains resilient despite challenges such as consumption leakage, the dampening impact of high living costs on spending, and persistent cost pressures on operators.
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Despite the rent rebound, the islandwide vacancy rate rose by 0.3 percentage points q-o-q to 7.1% in 2Q2025, amid weaker demand for retail spaces. URA data indicate a negative net absorption of 194,000 sq ft, a decline from 129,000 sq ft in the previous quarter.
Phua highlights that higher vacancies were concentrated in the Central Region, particularly in the Downtown Core. Several F&B and retail outlets shuttered during the quarter, including Privé at 313@somerset, Overjoyed at Orchard Cineleisure, Bamboo Bowl, Harvey’s by Panamericana, and Kaisen Ryori JJ.
The Rest of the Central submarket was the worst performer, posting a negative net absorption of around 75,000 sq ft, says Tricia Song, CBRE head of research for Singapore and Southeast Asia. She attributes this to the closure of several F&B operators, including private members’ club 1880, multi-concept dining 1939 Singapore and Wild Blaze Steakhouse at Tras Street.
Source: URA
In contrast, suburban retail continues to demonstrate strength. “The suburban retail market remains resilient, supported by strong residential catchments and ongoing consumer demand for convenience,” says Wong. The vacancy rate in the Outside Central Region (OCR) held steady at 5.2% with positive net demand.
Brands such as Luckin Coffee, Chagee, and Muchi Pancakes expanded across prime suburban malls during the quarter, reflecting continued interest in food and beverage (F&B) and lifestyle offerings. “Retail demand increasingly centres on experiential concepts, as consumers value tangible engagement despite online competition,” Wong adds.
Leonard Tay, head of research at Knight Frank Singapore, expects a “challenging” retail outlook in the next two quarters, citing protectionist trade policies, evolving consumer behaviour, and geopolitical tensions as factors that could weigh on turnover and confidence.
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Phua of JLL concurs, warning that occupier demand may soften further amid intense competition and high operating costs. “Retailer sensitivity to rent hikes in a challenging, uncertain environment could keep rents flat or cap growth for prime floor space in 2H2025,” she says.
However, CBRE’s Song offers a more optimistic take, pointing to a potential boost from recovering tourism and a “strong” line-up of MICE events and concerts. “With new supply projected to stay below historical norms, CBRE anticipates that overall prime retail rents will return to pre-COVID-19 levels by end-2025,” she concludes.