Singapore prime retail rents to grow by 1-2% this year

Rents dipped 0.6% in Q1 after three straight quarters of growth.

Singapore’s retail market turned in a mixed performance in Q1 2026, with headline rents easing even as demand for prime space remained resilient, according to CBRE, citing data from the Urban Redevelopment Authority (URA).

URA data showed that Central Region retail rents declined 0.6% quarter-on-quarter in Q1 2026, reversing three consecutive quarters of growth. In contrast, CBRE Research reported that islandwide prime floor rents rose 0.5% q-o-q, highlighting a bifurcated market where prime assets continue to outperform secondary locations.

CBRE Research noted that retail sales and tourism trends were volatile in the early part of the year due to the timing of Chinese New Year. Retail sales excluding motor vehicles fell 2.6% year-on-year in January but rebounded 12.1% in February. Visitor arrivals followed a similar pattern, declining 8.1% in January before rising 9.0% in February, driven by a surge in visitors from China. A further 10.1% increase in March brought total Q1 visitor arrivals up 2.8% y-o-y.

Leasing activity remained firm despite high-profile store closures, including The Providore, T2 Tea, Pull and Bear, and Nanyang Optical. URA data showed positive net absorption of 8,000 sq m in Q1, extending the 34,000 sq m recorded in Q4 2025. However, vacancy rates held steady at 6.4% due to incoming supply.

According to CBRE Research, demand was led by food and beverage operators such as Tutto, Jumboree and Molly Tea, alongside fashion brands including Jil Sander and Barehands. Lifestyle concepts also contributed, with art galleries such as Project Art Hunter and Kwai Fung Hin opening in conjunction with Singapore Art Week.

Submarket performance diverged during the quarter. The outside central region (OCR) led growth, recording net absorption of 13,000 sq m and tightening vacancy to 4.1%. Meanwhile, the Orchard submarket lagged, posting negative net absorption of 4,000 sq m following multiple store closures, which pushed vacancy up to 7.1%.

Looking ahead, Tricia Song, CBRE Head of Research for Singapore and Southeast Asia, said retailers continue to face headwinds from manpower shortages, rising operating costs and competition from e-commerce.

While tourism spending is expected to benefit from a strong pipeline of MICE events and concerts, this may be partly offset by reduced airline capacity due to elevated fuel costs. Nevertheless, Song noted that resilient consumer spending and Singapore’s safe haven appeal should underpin demand for prime retail space.

CBRE Research expects limited new supply over the next three years to support modest rental growth, forecasting prime retail rents to increase by 1 to 2% in 2026.