Singapore prime retail rents inch up 0.8% in Q2

It's a slower growth rate compared to the previous quarter’s 1.2%.

The Singapore Tourism Board (STB) reported a total of 6.28 million visitor arrivals in the first six months of 2023, with four consecutive months from March to June chalking up more than a million each month. Knight Frank said in a report that this was not yet at the monthly levels of the pre-pandemic record year of 2019, where monthly arrivals averaged above 1.5 million. 

“Nevertheless, the increasing number of visitors to Singapore has increased the need for more manpower in a retail sector that is already under pressure from the tight labour conditions symptomatic to the service industry. The ongoing labour crunch, rising business costs and high interest rates impacting business loans have created an uncertainty where more retailers and F&B operators are treading cautiously, with some holding back on expansion plans,” the report added.

Here’s more from Knight Frank:

As such, the growth of retail rents that accompanied post-pandemic recovery showed signs of slowing in Q2 2023. The average gross rent of prime spaces island-wide increased 0.8% q-o-q and 5.4% y-o-y to S$26.60 psf pm from April to June (Exhibit 1), a narrowing increment compared to the 1.2% q-o-q gain in the previous quarter. 

The Marina Centre, City Hall and Bugis micromarket recorded the largest increase of 1.4% q-o-q and 6.0% y-o-y to $24.50 psf pm, while other micromarkets saw increases ranging between 0.6% q-o-q and 1.0% q-o-q, and 3.9% y-o-y and 5.9% y-o-y.