Prime retail rents to see further recovery in 2023, with Orchard Road leading the way
In its 4Q2022 market statement, Knight Frank mentions that prime retail spaces in the Orchard Roadway location led the way in terms of lease progress, charting a boost of 3.1% y-o-y in 4Q2022 to $29.10 psf monthly, complied with by prime retail space in the Marina Centre, City Hall together with Bugis sub-market which signed up a development of 2.6% y-o-y to $23.90 psf monthly. The increase in rentals was sustained by a boost in international visitors landings, as well as the return of employees returned to the office.
According to data compiled by Knight Frank Research, prime retail leas island-wide climbed up 1.7% q-o-q in 4Q2022 to hit around $26.10 psf per month. This delivers full-year prime retail leasing growth to 2.6% for 2022.
Knight Frank’s Hsu is also projecting prime retail rentals to proceed increasing this year, indicating that the retail industry field is “in a better position now”, also taking into consideration the increase in the Goods and Services Tax (GST) furthermore an extra soft economic outlook. “As long as there are no size controls to events along with quarantine guidelines for cross border arrivings, prime rentals of retail space are likely to expand in between 3% and also 5% for the whole of 2023, with the prime shopping belt Orchard Road leading the rehabilitation,” he predicts.
A separate write up by Edmund Tie Research also emphasize information further pointing to the conditioning of need for retail industry rooms in the Orchard location. Based on retail assets tracked by the consultancy, prime first-storey retail space on Orchard and Scotts Roadway saw the toughest rental development of 7.4% for the entire of 2022 to $39.20 psf per month. In the edge and suburbs, rents grew by 6.7% in 2022 to $33.10 psf monthly, while in some other city places, it grew by 3.7% to $19.20 psf per month, based on Edmund Tie’s files.
The consultancy is predicting prime first-storey retail leas in Orchard along with Scotts Road to preserve its progression of in between 7% also 9% in 2023, whilst rentals in other retail sub-markets are prepared for to expand in between 3% and 6%.
Edmund Tie’s record also mentions that in 3Q2022, islandwide net engagement for retail spots clocked in at 323,000 sq ft, a four-fold increase from the 86,000 sq ft registered the past quarter, signalling enhancing necessity.
Lam Chern Woon, head of research and consulting at Edmund Tie, expects a brighter year in advance for the retail property market, supported by the proceeded recovery in the tourist field. “With the bulk of the supply pipe slated to find onstream in 2023, consisting of The Woodleigh Mall, and even retail shops at One Holland Village, Guoco Midtown as well as IOI Central, the supply-demand aspects are anticipated to be stabilized this year,” he adds.
The rehabilitation of the Singapore retail industry market acquired momentum in the last part of past year, regards to social distancing actions being calmed and also borders restarting. “The retail industry endured and has come through an exceptionally tough time of unprecedented obstacle, just commencing to acquire traction from the removal of actions from 2Q2022 along,” comments Ethan Hsu, Knight Frank Singapore’s head of retail.
