Singapore retail demand hits 205,000sq ft in Q3

Over half of this take-up came from the Downtown Core Planning Area.

In a recent report, Savills noted that following two quarters of subdued take-up in Singapore’s Central Region, there was a net demand of 205,000 sq ft in the region in Q3, which largely came from the improved take-up in the Downtown Core Planning Area (108,000 sq ft).

“Along with the increase in visitor arrivals, the Orchard Area also saw an uptick in net demand (32,000 sq ft), thereby easing 0.4 percentage points (ppts) QoQ of the vacancy rate to 6.5% in Q3,” the report said.

Here’s more from Savills:

As demand in the Suburban Area remained steady, the islandwide retail vacancy fell from 7.1% in Q2 to 6.9% in Q3 amid limited new supply. The overall improvement in occupancy rate could be attributed to landlords being more flexible with their terms, especially for less prime spaces, as more tenants seek to terminate their leases early.

Notwithstanding the market harbouring cautious sentiments, the Urban Redevelopment Authority’s (URA) rental index in the Central Region continued to rise, going up by 0.9% QoQ in Q3. The rental index in the Central Area and Fringe Area recorded another quarter of healthy growth in Q3, increasing by 1.1% and 0.5% QoQ respectively.

According to Savills’ basket of retail properties, the average monthly rent in the Orchard and Suburban Area also went up by 0.5% QoQ to S$23.50 psf and 0.3% QoQ to S$14.80 psf respectively in Q3.