Singapore retail rents to increase by up to 2% this year

The retail outlook remains positive but measured.

Singapore's retail property market is expected to remain resilient through the rest of 2026, supported by healthy consumer spending and a firm labour market, according to Savills.

The property consultancy cautioned that elevated living costs and global economic uncertainty could continue to weigh on discretionary spending. However, it expects demand for essential goods and services to support suburban malls, which benefit from large catchment populations and recurring footfall.

Savills also pointed to signs that more spending could be retained domestically as economic uncertainty and higher travel costs weigh on overseas travel. Growth in outbound air travel by Singapore residents slowed to 1.7% year on year in Q2 2026, from 4.3% in Q1, while tourist arrivals declined 6.6% year on year.

Despite the decline in tourist arrivals, prime retail precincts such as Orchard Road continue to attract spending, with concepts targeting Gen Z and Generation Alpha consumers helping sustain demand. Luxury, beauty, wellness and experiential brands are also seeking prime locations that offer visibility and strong brand presence, Savills said.

Suburban malls, meanwhile, could benefit if Singapore residents defer or reduce overseas travel and redirect more spending locally.

Savills expects leasing demand to remain healthy, particularly in established retail clusters, given the limited near-term supply pipeline. Stable occupancy should support moderate rental growth across prime retail assets.

However, performance is likely to become increasingly differentiated. Savills said well-located assets with strong tenant curation and experiential offerings are likely to outperform.

Overall, the consultancy described the outlook as positive but measured, forecasting average passing rents at both Orchard Road and suburban malls to increase by up to 2% in 2026.