Prime retail rents to see further recovery in 2023, with Orchard Road leading the way

A different report by Edmund Tie Research also emphasize data additionally pointing to the fortifying of interest for retail areas in the Orchard location. Based on retail properties tracked by the consultancy, prime first-storey retail area on Orchard and Scotts Roadway saw the best rental growth of 7.4% for the whole of 2022 to $39.20 psf per month. In the edge and suburban areas, leas expanded by 6.7% in 2022 to $33.10 psf monthly, while in some other city places, it expanded by 3.7% to $19.20 psf monthly, based upon Edmund Tie’s files.

In its 4Q2022 market record, Knight Frank notes that prime retail rooms in the Orchard Road location blazed a trail in regards to rental development, laying out a rise of 3.1% y-o-y in 4Q2022 to $29.10 psf each month, followed by prime retail room in the Marina Centre, City Hall and even Bugis sub-market which registered a growth of 2.6% y-o-y to $23.90 psf per month. The surge in rentals was maintained by a boost in global visitors landings, in addition to the return of employees went back to the office.

The consultancy is predicting prime first-storey retail rents in Orchard and Scotts Roadway to maintain its progression of in between 7% also 9% in 2023, whilst rentals in other retail sub-markets are prepared for to develop in between 3% as well as 6%.

According to data compiled by Knight Frank Research, prime market rentals island-wide climbed 1.7% q-o-q in 4Q2022 to hit around $26.10 psf each month. This delivers full-year prime retail rental expansion to 2.6% for 2022.

Edmund Tie’s record in addition mentions that in 3Q2022, islandwide final absorption for retail spaces appeared at 323,000 sq ft, a four-fold rise from the 86,000 sq ft registered the prior quarter, signalling strengthening demand.

The recovery of the Singapore retail industry market got force in the last part of past year, regards to social distancing measures being soothed and boundaries reopening. “The retail field endured and has indeed withstood an exceptionally tough time of unexpected challenge, just commencing to acquire traction from the clearing of steps from 2Q2022 onwards,” remarks Ethan Hsu, Knight Frank Singapore’s head of retail industry.

Knight Frank’s Hsu is also projecting prime retail rentals to carry on increasing this year, mentioning that the retail market is “in a better position now”, even taking into account the increase in the Goods and Services Tax (GST) furthermore a much more muted economic overview. “As long as there are no size limits to celebrations and quarantine requirements for cross border returns, prime leas of retail area are most likely to expand in between 3% and 5% for all of the of 2023, with the prime purchasing belt Orchard Road leading the improvement,” he anticipates.

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Lam Chern Woon, head of research and consulting at Edmund Tie, anticipates a better year in advance for the retail estate market, sustained by the proceeded healing in the tourism field. “With the bulk of the supply pipeline slated ahead onstream in 2023, consisting of The Woodleigh Shopping mall, and retail outlets at One Holland Village, Guoco Midtown along with IOI Central, the supply-demand dynamics are expected to be stabilized this year,” he includes.


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