Average prime first-storey monthly gross rent of specialty retail shops dipped 1.2% q-o-q to about $29.30 psf in 3Q2016, according to Edmund Tie & Company’s latest retail report in 3Q2016.

The decline was mainly attributed to a subdued economic growth forecast, as well as job cuts across various industries that led to weaker consumer sentiment.

Monthly rents in the other city areas led the overall rental decline in 3Q2016, falling by 3.0% q-o-q to about $20.10 psf. This was followed by the suburban areas, with average monthly gross rents declining by 1.5% q-o-q to $30.60 psf.

In Orchard and Scotts Road, rents remain flat at $37.20 psf despite slower economy and fears over the spread of the Zika virus. The resilience of this district was owing to a lack of new retail developments.

Landlords and retailers are integrating technology with their physical stores to manage labour constraints and tap on the growing e-commerce market.

Edmund Tie & Company’s Southeast Asia Head of Research, Lee Nai Jia, believes that it is too premature to write off the brick-and-mortar retail sector. “In order to remain competitive, landlords and retailers are continuously looking for ways to improve their business models and remain adaptable to challenges,” adds Lee.

Edmund Tie & Company expects the decline in rents to moderate in 2017, barring any external shocks.