, Singapore
1 view

Singapore's retail and industrial property market expected to recover in 2021

Retail rents in Singapore declined 2.5% on average in H2 2020.

Singapore's retail property market is expected to stabilise and gradually recover in 2021 whilst its industrial property market is likewise set to recover due to high demand in logistics warehouses and hi-specs space, reports Colliers International.

According to Colliers Research, the rent in Orchard Road ground-floor spaces declined 2.6% HoH in H2 2020 to US$28.05 (S$37.24) per sq. ft. per month. In Regional Centres, figures are at a decline of 2.3% HoH to US$23.86 (S$31.68) per sq. ft. per month. These figures are considered by Colliers Research as the worst in its record, bringing a total full-year average retail rental decline to 7.2% YoY.

Jonathan Denis-Jacob, director and head of consulting and advisory services, said that brick-and-mortar retail is seen to stay especially among retailers. Rapid take-up of large prime retail footprint was also observed.

“Brick-and-mortar retail will remain relevant and is here to stay, especially for global retailers. Whilst we saw several high-profile retail brand closures, although not all these were strictly related to COVID-19, we also saw some resilient brands quickly backfilled these vacated space with new concepts,” he said.

“We have seen a rapid take-up of a large prime retail footprint despite the ongoing pandemic. For example. the three former Robinsons' spaces were taken over very quickly by major retailers for their concept stores such as IKEA at JEM, and more recently, BHG at Raffles City and Courts at The Heeren,” he added.

Recovery was seen as uneven among the different trades. However, improvement on retail sales was significant, as it recorded a 4.5% decline YoY in December 2020.

The research attributes this from the easing of restrictions in Singapore. Double-digit sales growth was seen from supermarkets, IT products, furniture and household products, and sporting goods.

Tricia Song, head of research for Singapore, said that rents are seen to improve after virus containment is set in place and upon resumption of travel.

“With this uneven recovery, landlords will rejig tenant mix and pivot their strategies leading average retail rents to remain flat in 2021. Rents could improve thereafter with widespread virus containment and resumption of travelling,” she said.

For the industrial property market, the research noted that Singapore was relatively resilient in 2020. JTC rental and price index declined at 1.5% YoY and 2.7% YoY, respectively. On the other hand, industrial occupancy increased by 0.7 ppt to 89.9% in 2020.

Colliers Research expects a recovery in 2021 for Singapore due to the demand for business parks and hi-spec cases. These are to be supported by the thriving technology sector and biomedical manufacturing.

Whilst factory rents are expected to remain flat based on ample supply, warehouse logistics is seen with a projected growth of 1.3% YoY.

Song noted that decline in warehouse rents in 2020 might have been caused by landlords prioritising occupancy.

“Warehouse rents had surprisingly declined in 2020, albeit marginally, despite higher take-up. This could be due to landlords prioritising occupancy over rents, especially during a period of crisis,” she said.

“Sustained demand for e-commerce and tighter occupancy should support rental growth for the logistics space in the next few years,” she added.

(US$1 = SGD1.33)

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Get Realestate Asia in your inbox

Taiwan commercial transaction volumes hit record highs in Q1

Total volumes surged 241% to USD1.5b during the quarter.

Are Thai property buyers finally ditching the ‘wait and see’ approach?

They are beginning to establish acquisition strategies for this year.

Don’t be fooled by Singapore retail sector’s improving demand indicators 

The sector’s recovery won’t start until 2022.

Philippine residential prices to inch up 1.5% in 2022

The pace of growth will likely hinge on a rebound in office leasing. 

APAC data centre demand to double in 3-5 years

Singapore, Hong Kong, Mumbai, Sydney, Seoul and Tokyo are promising markets, says Knight Frank.

Japan’s property investment market unfazed by ongoing lockdowns

There were 18 en-bloc transactions with a combined value of USD2.3b in Q1 2021.

Indonesian property sector to get a boost from these government incentives

These include a waiver of the 10% VAT on property sales under IDR2 billion.

These 3 properties bolstered Singapore’s impressive home sales in Q1

Over 42% of the 3,376 units sold during the quarter were from these properties.  

Korean office transaction volumes hit USD2.1b in Q1

There were 7 en-bloc transactions closed during the quarter.

Here’s why Melbourne’s office market will see more activity in Q2

Colliers expects increased market activity across assets higher up the risk curve. 

Contact me about the awards