Singapore retail rents expected to rise up to 2% this year

Geopolitical risks and cross-border spending are weighing on the retail outlook.

Singapore's retail market is expected to remain supported by a resilient labour market, although downside risks are beginning to emerge, according to Savills.

The consultancy said potential inflationary pressures linked to the ongoing Middle East conflict could weaken consumer purchasing power and weigh on discretionary spending later in the year, depending on the duration of geopolitical tensions and the broader economic response.

Cross-border spending continues to pressure some retail segments, although Savills expects the upcoming Johor Bahru-Singapore Rapid Transit System Link to have only a limited additional impact given the already high level of travel integration between the two markets.

The firm added that strengthening of the Malaysian ringgit and rising prices in Malaysia could help reduce outbound spending leakage over time, while continued tourist arrivals should provide support for local retail sales.

Overall, Savills said Singapore's retail market remains underpinned by stable fundamentals, although rental growth is likely to remain modest as landlords focus on tenant mix optimisation and experiential offerings to drive traffic. The consultancy forecasts rents for both Orchard Road and suburban malls will increase by up to 2% in 2026.