
Singapore retail vacancy rate rises to 6.8% in Q1
The additional 323,000sq ft of new stock took time to be absorbed.
After five quarters of positive net take-up, net demand in Singapore’s retail property market registered -129,000 sq ft in Q1/2025 as occupied space fell across most areas, according to data from a Savills report.
“Furthermore, the recent completion of Punggol Coast Mall and the revamp of The Cathay put more pressure on islandwide retail vacancy as they took time to be absorbed. As such, the addition of new retail space (323,000 sq ft) pushed islandwide retail vacancy up from 6.2% in the previous quarter to 6.8% in Q1,” the report said.
Here’s more from Savills:
Notwithstanding the softer vacancy, some landlords of prime malls along Orchard observed healthy momentum for lease renewals, especially from luxury retailers. As high-end brands need a presence in Orchard, the major shopping destination in Singapore, landlords are still able to negotiate for higher rents for lease renewals because of limited supply on the strip.
Despite challenges such as tight labour supply and rising costs, the limited availability of prime retail space in Orchard helped to support rents in the area. Even as existing tenants exit, vacated prime spaces are often quickly filled by new-to-Singapore retailers. For instance, Japanese thrift shop giant 2nd Street took over the premises in the basement at 313 Somerset which was vacated by clothing retailer Pomelo.
While prime rents continue to grow, there are signs of rents starting to come under pressure across the Central Region in Q1. According to the Urban Redevelopment Authority’s (URA) rental index data, rents in the Central Area slipped by 0.2% quarter-on-quarter (QoQ) while those in the Fringe Area fell by 1.1% QoQ in Q1. This resulted in a 0.5% QoQ decline in the rental index in the Central Region. According to Savills’ basket of retail properties, the average monthly rent in the Orchard Area and Suburban Area remained flat at S$23.20 per sq ft and S$14.70 per sq ft respectively in Q1.