Retail rents are showing signs of stabilisation, with gross rents for first-storey retail space in the Orchard/Scotts Road area remaining unchanged q-o-q at $37.20 psf per month in 1Q2017, according to a report released by Edmund Tie & Co.

The decline in first-storey retail rents at Raffles Place, City Hall, Tanjong Pagar, Shenton Way and Bugis has also moderated to 0.6% q-o-q in 1Q2017.

ET & Co says the stabilisation of rents comes on the back of higher visitor arrivals and stronger retail sales in 2016. According to preliminary estimates from the Singapore Tourism Board in February, tourist arrivals grew 7.7% y-o-y to 16.4 million and tourism receipts rose 13.9% y-o-y to $24.8 billion. Retail occupancy across the island also improved towards end-2016, reaching 91.5% in 4Q2016 from 90.6% in 3Q2016.

Rents for first-storey retail space at suburban malls also remained unchanged q-o-q in 1Q2017 at $30.60 psf per month. ET & Co says suburban malls are relying more on their F&B tenants to support their revenue.

ET & Co expects retail rents to remain under pressure from the external environment and continued growth of e-commerce.