Singapore retail vacancy hits 3-year low of 7.8% in Q3

Thanks to the higher takeup in the Central region.

Singapore retail stores are now seeing more foot traffic, giving retailers some confidence that the sector is slowly gaining back its normalcy. According to a Savills report, retail vacancy eased to a three-year low at 7.8% in Q3/2022. 

Here’s more from Savills:

The occupancy rate in the Central Region improved on the back of an increase in appetite for taking up retail space across all areas, particularly in the Rest of Central Area and Fringe Area. The take-up rate in Downtown Core Planning Area and Orchard Planning Area also improved as tourism numbers continue to increase. 

While retail vacancy in the Central Region fell 0.5 of a percentage point (ppt) QoQ to 9.3%, that in the Outside Central Region remained unchanged at 5.1% in Q3. The latter’s performance could be due to the subdued take-up in the newly revamped Grantral Mall @ Macpherson (retail component of the former Citimac Industrial Complex). 

Although sentiment has greatly improved from 2021, the overall rental growth is hinting that on a locational basis, the market remains mixed. According to the Urban Redevelopment Authority’s (URA), retail rental index for the Central Region fell again by 0.4% QoQ in Q3, extending the 0.5% QoQ decline in Q2. 

On the other hand, prime retail rents continued to rise as more foreign brands entered the local market when prime spaces were freed up. This could have helped to match up to landlords’ higher rental expectations. As a result, Savills monthly prime rents3 in Orchard Area and Suburban Area by 1.0% QoQ to S$21.30 psf and 0.7% QoQ to S$23.20 psf respectively in Q3.