Prime retail rents to see further recovery in 2023, with Orchard Road leading the way

/ EdgeProp Singapore |
Prime retail rents in the Orchard Road area saw the highest increase in 4Q2022, outperforming other sub-markets (Picture: Albert Chua/The Edge Singapore)
Join our  Telegram  channel and follow our  Facebook  for the latest update.
SINGAPORE (EDGEPROP) - The recovery of the Singapore retail market gained momentum in the latter half of last year, thanks to social distancing measures being relaxed and borders reopening. “The retail sector endured and has come through an extremely difficult time of unprecedented challenge, only starting to gain traction from the removal of measures from 2Q2022 onwards,” comments Ethan Hsu, Knight Frank Singapore’s head of retail.
According to data compiled by Knight Frank Research, prime retail rents island-wide climbed 1.7% q-o-q in 4Q2022 to reach an average of $26.10 psf per month. This brings full-year prime retail rental growth to 2.6% for 2022.
In its 4Q2022 retail report, Knight Frank notes that prime retail spaces in the Orchard Road area led the way in terms of rental growth, charting an increase of 3.1% y-o-y in 4Q2022 to $29.10 psf per month, followed by prime retail space in the Marina Centre, City Hall and Bugis sub-market which registered a growth of 2.6% y-o-y to $23.90 psf per month. The rise in rents was supported by an increase in international tourist arrivals, as well as the return of workers returned to the office.
A separate report by Edmund Tie Research also highlights data further pointing to the strengthening of demand for retail spaces in the Orchard area. Based on retail assets tracked by the consultancy, prime first-storey retail space on Orchard and Scotts Road saw the strongest rental growth of 7.4% for the whole of 2022 to $39.20 psf per month. In the fringe and suburban areas, rents grew by 6.7% in 2022 to $33.10 psf per month, while in other city areas, it grew by 3.7% to $19.20 psf per month, based on Edmund Tie's data.
average retail rents - EDGEPROP SINGAPORE
Edmund Tie’s report also points out that in 3Q2022, islandwide net absorption for retail spaces clocked in at 323,000 sq ft, a four-fold increase from the 86,000 sq ft registered the previous quarter, signalling strengthening demand.
Lam Chern Woon, head of research and consulting at Edmund Tie, expects a brighter year ahead for the retail property market, supported by the continued recovery in the tourism sector. “With the bulk of the supply pipeline slated to come onstream in 2023, including The Woodleigh Mall, and retail shops at One Holland Village, Guoco Midtown and IOI Central, the supply-demand dynamics are expected to be balanced this year,” he adds.
The consultancy is forecasting prime first-storey retail rents in Orchard and Scotts Road to sustain its growth of between 7% and 9% in 2023, while rents in other retail sub-markets are anticipated to grow between 3% and 6%.
Knight Frank’s Hsu is also projecting prime retail rents to continue growing this year, noting that the retail sector is “in a much better position now”, even taking into account the increase in the Goods and Services Tax (GST) and a more muted economic outlook. “So long as there are no size limits to gatherings and quarantine requirements for cross border arrivals, prime rents of retail space are likely to grow between 3% and 5% for the whole of 2023, with the prime shopping belt Orchard Road leading the recovery,” he predicts.

Follow Us
Follow our channels to receive property news updates 24/7 round the clock.
EdgeProp Telegram
EdgeProp Facebook
Subscribe to our newsletter

Our Site (previously known as The Edge Property Singapore) is the best property portal for real estate agents, investors, home-seekers and sellers alike in Singapore. On EdgeProp, you will be able to find the latest and hottest property news, property listings, and access tools for your research and analysis.

Whether you are looking to buy, sell or rent apartments, condominiums, executive condos, HDBs, landed houses, commercial properties or industrial properties, we bring you Singapore’s most comprehensive and up-to-date property news and thousands of listings to facilitate your property decisions. Click into any listing to check out the new AI Redesign tool to envision your property based on your preferred style, be it Scandinavian, Minimalist or many others.

View More