Singapore’s suburban retail vacancy rates hit 5-year low of 6.4%
Thanks to residential catchments that drive demand.
The resurgence of COVID-19 cases and the subsequent dine-in ban caused retail footfall to decline in Singapore. As a result, suburban retail rents dipped by 0.7% qoq in Q3 2021. Nonetheless, Cushman & Wakefield reveals that residential catchments continue to support demand, causing vacancy rates to drop to 6.4% in Q2 2021, around a five-year low.
“In contrast, retail rents in other city areas fell 2.7% qoq in Q3 2021, as traffic from office workers continued to be battered by the prevalence of work-from-home arrangements.”
Here’s more from Cushman & Wakefield:
Orchard retail rents dipped 1.1% qoq in Q3 2021, softening from the rental decline of -2.0% qoq in previous quarter. Orchard retail should see persistent demand from coveted brands that opt for prime spaces in the area as they lock in current attractive rents while awaiting the easing of safe management measures.
A case in point was local Vietnamese food chain, Mrs Pho House, which opened an outlet at Takashimaya Shopping Centre in Q3 2021, following an expansion in the previous quarter at 313@Somerset. The Orchard retail market would see further upside from the gradual re-opening of borders with pilot schemes such as the new Vaccinated Travel Lane.
Experiential and Activity-based Retail Continue to Drive Demand
Providers of recreation activities and engaging in-store experiences remain key to attract foot traffic and enhance destination appeal of malls. Esports experience centre, EXP, and children playground provider, Petite Tayo Kids Club, debuted in Kallang Wave Mall, while children education provider, One World International School, and pastry making course provider, Whisk Baking Studio, opened in Suntec City Mall. Blended lifestyle retail spaces, which combine shopping with other experiences, are also sprouting up. Examples include the launch of FairPrice Xtra with a cocktail bar and dine-in corner at Parkway Parade earlier this year and the revamp of Market Place at Paragon to CS Fresh Gold where it has stations serving ready-to-eat meat roasts and seafood. As activity-based and blended lifestyle retailers continue to expand and offer experiences that are difficult to replicate online, other retailers will also need to continuously innovate and adapt to new customer expectations.