Singapore suburban area records highest net retail demand in five quarters

Thanks to the healthy pre-commitment rate in Pasir Ris Mall.

According to a recent Savills report, compared to 6.7% in Q1, the islandwide vacancy rate for retail space in Singapore slipped to 6.6% in Q2. This was due to a 495,000-sq ft increase in occupied space, which outpaced the net supply of 463,000 sq ft in Q2. 

Notably, the net demand in Q2 was significantly higher than in Q1 (86,000 sq ft), as the absorption rate improved across all regions except in the Orchard Area (no net absorption in Q2). 

Here’s more from Savills:

Owing to a healthy pre-commitment rate in the newly opened Pasir Ris Mall, the Suburban Area posted the highest net demand over the last five quarters and saw a marginal decrease (-0.1 percentage points (ppt) QoQ) to 4.6%. 

The Urban Redevelopment Authority’s (URA) retail rental index in the Central Region remained flat in Q2, ending the two-quarter decline. In the face of economic uncertainty and weak retail sales, landlords continue to focus on occupancy rates while keeping their rental expectations realistic. 

Savills’ retail rental growth showed further signs of moderating in Q2, with average monthly rents in the Orchard Area rising by 0.6% QoQ to S$23.00 psf. The average retail passing rent in Savills’ basket of retail properties in the Suburban Area remained unchanged at S$14.70 psf in Q2.

Photo from Pasir Ris Mall's website