Singapore retail vacancy dips to 6.6% in Q2

Thanks to robust occupier demand during the quarter. 

In 2Q24, JLL said resilient occupier demand and moderated supply drove retail vacancy rates lower. URA’s islandwide vacancy rate declined 0.1 percentage points q-o-q to 6.6% in 2Q24, reversing the marginal increase of 0.2 percentage points q-o-q in 1Q24, led by a 0.7 percentage point q-o-q decline in the vacancy rate in the Rest of Central Area in the Central Region to 8.8% in 2Q24. The vacancy rate in the overall Central Region remained stable on a q-o-q basis, at 7.7% in 2Q24. 

Angelia Phua, Consulting Director, Research and Consultancy, Singapore, JLL said: “We continued to observe strategic expansion by retailers in the broader retail market across diverse trades, led by food and beverage, active lifestyle/sports-related operations and beauty and wellness establishments. The opening of Pasir Ris Mall in June 2024 with a healthy pre-commitment rate further attests to the healthy occupier demand for retail space.”

Here’s more from JLL:

In 2Q24, the line-up of new store openings included Hoka, a US sportswear brand, which opened in ION Orchard, and Toebox, Korea’s leading kids clothing brand, which opened in Wisma Atria. At Marina Square, the BHG Select pop-up and a multi-brand retail concept specialising in outdoor and sports gear, Liv Activ, opened at the mall, taking up spaces vacated by Zara and North Face, respectively.

In the Outside Central Region, doughnut chain Mister Donut expanded its presence with the opening of two additional outlets, one at Jurong Point and one at Northpoint City. Tampines Mall refreshed its F&B offerings with the addition of Yang Guo Fu Mala Tang, Lao Huo Tang and Tanjong Rhu Pau (kiosk space), as well as enhanced its beauty and wellness offerings with the opening of IVI Aesthetic Clinic and Spacio TCM Wellness.

Retail rents remained flat in 2Q24 on stabilising vacancy rates in the Central Region. URA’s retail rental index in the Central Region remained unchanged q-o-q in 2Q24, following two consecutive quarters of declines. The uncertain economic outlook, which led landlords to compromise on rents and prioritise occupancy rates, likely capped rent growth and resulted in rents remaining stable in 2Q24.

Retail asset prices dipped in 2Q24, despite rents remaining fairly stable. The URA price index in the Central Region fell 1.2% q-o-q in 2Q24, reversing four consecutive quarters of increases. The elevated interest rate environment that raises funding costs has led to investors’ cautionary stance, which likely accounted for the soft retail property prices in the quarter.