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

A separate report by Edmund Tie Research also feature records better indicating the conditioning of demand for retail spaces in the Orchard area. Based on retail possessions tracked by the consultancy, prime first-storey retail space on Orchard as well as Scotts Road observed the toughest rental buildup of 7.4% for the whole of 2022 to $39.20 psf each month. In the fringe and suburban areas, rents grew by 6.7% in 2022 to $33.10 psf monthly, while in various city areas, it expanded by 3.7% to $19.20 psf each month, based upon Edmund Tie’s information.

Knight Frank’s Hsu is also projecting prime retail rents to continue expanding this year, noting that the retail field is “in a far better placement currently”, even considering the increase in the Goods and Services Tax (GST) furthermore a much more soft economical overview. “As long as there are no dimension restricts to gatherings along with quarantine requirements for cross boundary arrivings, prime rentals of retail space are most likely to grow in between 3% and also 5% for the entire of 2023, with the prime shopping belt Orchard Road leading the improvement,” he anticipates.

In its 4Q2022 retail record, Knight Frank notes that prime retail spaces in the Orchard Road place blazed a trail in terms of rental progress, laying out a rise of 3.1% y-o-y in 4Q2022 to $29.10 psf monthly, adhered to by prime retail area in the Marina Centre, City Hall and even Bugis sub-market which registered a development of 2.6% y-o-y to $23.90 psf each month. The surge in rents was sustained by a rise in foreign tourist arrivings, in addition to the return of workers returned to the workplace.

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The consultancy is predicting prime first-storey retail rents in Orchard along with Scotts Road to maintain its progression of between 7% also 9% in 2023, even though rents in other retail sub-markets are prepared for to grow in between 3% and 6%.

Lam Chern Woon, head of research and consulting at Edmund Tie, projects a brighter year in advance for the retail real estate market, sustained by the continued recovery in the tourist sector. “With the bulk of the supply pipeline slated to come onstream in 2023, consisting of The Woodleigh Shopping center, and retail stores at One Holland Village, Guoco Midtown as well as IOI Central, the supply-demand dynamics are anticipated to be stabilized this year,” he adds.

The improvement of the Singapore retail store market obtained momentum in the latter part of previous year, regards to social distancing strategies being soothed and also boundaries reopening. “The retail field withstood and has indeed survived a very tough time of unexpected challenge, just commencing to get grip from the removal of measures from 2Q2022 along,” comments Ethan Hsu, Knight Frank Singapore’s head of retail industry.

Edmund Tie’s report even points out that in 3Q2022, islandwide net absorption for retail places clocked in at 323,000 sq ft, a four-fold rise from the 86,000 sq ft enrolled the preceding quarter, signalling enhancing necessity.

According to data compiled by Knight Frank Research study, prime retail leas island-wide climbed 1.7% q-o-q in 4Q2022 to reach around $26.10 psf each month. This brings full-year prime retail leasing expansion to 2.6% for 2022.


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