Retail rents slip 0.6% q-o-q in 1Q2026, reversing three consecutive quarters of expansion

Ashley Lo

/ EdgeProp Singapore

April 24, 2026 5:50 PM SGT

ashley.lo@edgeprop.sg

Light

Dark

The Orchard submarket recorded a negative net absorption of 4,000 sq m (43,000 sq ft), extending the 5,000 sq m (54,000 sq ft) decline in 4Q2025. (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Overall rents in Singapore’s retail market fell by 0.6% q-o-q in 1Q2026, reversing from the moderate quarterly gain of 0.6% that it recorded last quarter, according to the latest URA statistics published on April 24.

Leonard Tay, head of research at Knight Frank Singapore, says the decline comes on the back of three consecutive quarters of expansion, driven by rental decreases across the central and fringe areas, which observed q-o-q contractions of 0.2% and 1.5%, respectively.

He attributes the fall in retail rents to a shift in landlord expectations, in response to operating challenges faced by tenants.

On a yearly basis, retail rents increased 1.8% in 1Q2026, marginally lower than the 1.9% growth posted in 4Q2025.

Strong leasing momentum amid store closures

Leasing momentum remained firm in 1Q2026, with islandwide net absorption of 8,000 sq m (86,000 sq ft), extending the previous quarter’s positive net absorption of 34,000 sq m (366,000 sq ft).

This comes despite several store closures during the quarter, with retail trade cessations surging 29.2% y-o-y, according to Wong Shanting, director and head of research at Newmark. This includes F&B chain The Providore, which closed all six of its outlets in March. Other closures include clothing retailer Pull & Bear, having shuttered its last outlet in February; and Nanyang Optical, which has closed four outlets this year.

However, due to an influx of new entrants, islandwide private retail vacancy rates remained unchanged from the previous quarter at 6.4%, notes Tricia Song, head of research in Singapore and Southeast Asia at CBRE.

Newmark’s Shanting adds that retail trade formations rose 26.9% y-o-y, alongside stronger leasing activity in the F&B sector, which recorded a 7.7% y-o-y increase in trade formations in 1Q2026. New entrants include Tutto by Da Paolo at One Holland Village, Jumboree Food Hall in Tai Seng and Molly Tea at Orchard Central.

New openings within the fashion landscape further supported leasing demand, with Jill Sander opening its second boutique in Paragon, alongside lifestyle concepts – particularly art galleries that launched in conjunction with Singapore Art Week, such as Project Art Hunter and Kwai Fung Hin.

OCR continues to drive growth

The outside central region (OCR) continues to outperform other sub-markets, posting the highest net absorption of 13,000 sq m (140,000 sq ft), notes CBRE’s Song. Vacancy rates in the region also tightened to 4.1% in 1Q2026, from 4.4% in the previous quarter.

Song attributes the performance of the OCR submarket to the “gradual take-up” at Lentor Modern mall, which was completed in August 2025.

Meanwhile, the Orchard submarket recorded a negative net absorption of 4,000 sq m (43,000 sq ft), extending the 5,000 sq m (54,000 sq ft) decline in 4Q2025. Retail vacancy rates also edged up to 7.1% in 1Q2026, following a series of store closures including Itacho Sushi, Lady M and Royal Secrets Wellness, adds Song.

Mounting headwinds amid Middle East conflict

Amid a surge in retail closures due to elevated operating costs and rising rents, the ongoing Middle East conflict could further intensify existing headwinds facing the retail sector, says Newmark’s Wong.

“The wave of mall ownership changes could also see retail rents rise in the near term, leaving little relief in sight for retailers in the months ahead,” she adds.

Knight Frank Singapore’s Tay echoes this sentiment, noting that prolonged geopolitical uncertainty could dampen consumer confidence as spending becomes increasingly cautious.

Despite this “immediate knee-jerk reaction,” Tay adds that disruptions to travel flows between Europe and the Asia Pacific could see Singapore capturing diverted tourist demand, particularly from Chinese and Japanese visitors. “Orchard Road retail could stand to benefit from inflows of high-net-worth individuals, boosting luxury retail turnover and flagship store demand,” he says, maintaining his initial forecast of 2%–4% growth in overall prime retail rents.

That said, CBRE’s Song adds that with new supply over the next three years expected to remain below historical averages, prime retail rents could see more modest growth of 1%–2% in 2026.

Property updates, 24/7.

Subscribe to Newsletter

Market insights, delivered weekly.

Retail rents slip 0.6% q-o-q in 1Q2026, reversing three consecutive quarters of expansion

Related Articles