Singapore retail rents post first increase in eight quarters, up 0.6% in 4Q2021

By Atiqah Mokhtar

/ EdgeProp Singapore |

January 28, 2022 5:32 PM SGT

Credit: Albert Chua/The Edge Singapore

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SINGAPORE (EDGEPROP) - The Singapore retail market turned a corner in 4Q2021, with retail rents growing 0.6% during the quarter, reversing from the 2.7% decline recorded in 3Q2021. This marks the first increase logged in eight quarters.

Read also: Singapore office rents rebound in 2021, growing 1.9% y-o-y

The data, released by the URA on Jan 28, also showed retail prices increasing 1.9% in 4Q2021 after remaining unchanged in the previous quarter.

For the whole of 2021, rentals of retail space decreased by 6.8%, compared with the decrease of 14.7% in 2020, while prices of retail space decreased by 4.2%, marginally less than the 4.5% decrease logged in 2020.

Angelia Phua, JLL’s consulting director, research and consultancy, Singapore, believes that the retail property market is showing positive signs of an early-stage turnaround. She points out islandwide retail vacancy rates held stable and unchanged q-o-q at 8.1% in 4Q2021, on the back of firm occupier demand.

“Also, in 2021, vacancy rates fell 0.7 percentage points y-o-y to 8.1%. This was due to lower vacancy rates across all areas in the Central Region except for Downtown Core, and Outside Central Region (OCR),” she adds.

Cushman & Wakefield’s head of research Wong Xian Yang highlights that suburban retail vacancy rates continued to lower marginally to 6.1% in 4Q2021, the lowest rate seen in six years. This was underpinned by robust take-ups at newly developed suburban malls including Northshore Plaza and i12 Katong.

Meanwhile, the occupancy rate in the Orchard planning area grew for the second consecutive quarter to 88.7% in 4Q2021 from 88.4% in 3Q2021.

Retailer sentiment is expected to improve in the coming quarters, given current vaccination rates and the rollout of the booster shots.

Lam Chern Woon, head of research & consulting at Edmund Tie, anticipates suburban retail rents to continue leading the recovery in 2022, forecasting 5% to 10% rental growth.

Retail locations in Orchard and the CBD could also see improved performance in 2022 as cross-border travel progressively increases.

“There is every chance that retail rents island-wide will turn positive in the process of rebound, growing between 2% and 4% for the whole of the year,” says Leonard Tay, head of research at Knight Frank Singapore.

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