Singapore Prime Orchard retail rents to grow by 3% this year

Prime Suburban rents are also expected to rise by 2%. 

Retailers could expect to see footfall and sales recovering as a result of easing restrictions and the reopening of the economy. 

The increase in dine in group sizes has helped to lift F&B sales according to Savills, while the increase of workplace capacity and the reduction in inbound international travel restrictions are likely to improve footfall to the CBD and main shopping destinations such as Orchard Road and Marina Bay Sands. 

Here’s more from Savills:

Coupled with a stabilisation in the hospitalisation numbers, a sense of normalcy has returned and ‘business as usual’ is the attitude adopted by more and more retailers. We expect more global retailers to potentially set up in Singapore as both domestic consumption and tourist expenditure embarks on their road to recovery. 

While rising business operating costs continue to put retailers under pressure, some retailers such as Daiso are in expansion mode with two more stores over the coming months. Despite higher raw material and logistics costs, Daiso has two more stores in the pipeline (NEX and Ang Mo Kio), following the recent opening of its new 15,000-sq ft flagship store at Jurong Point. The steady footfall and demand for essential retail services in suburban malls are expected to continue supporting rental growth in suburban prime retail rents. 

In the face of a tapering retail pipeline supply in Orchard in the near term, Orchard prime retail rents are also forecast to increase on the back of revenge tourism. Although there are signs that retailers may not be able to fully pass on increases in their cost of goods, the uplift in sales arising from greater tourist arrivals, especially medical tourism, and the removal of dining in group sizes and safe distancing measures for F&B operators, is momentarily able to off set these longer-term inflationary issues. For this and the reasons expounded above, we expect Prime Orchard retail rents to rise by 3% YoY and for Prime Suburban rents to rise by 2% YoY.