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

A different statement by Edmund Tie Research also feature information further pointing to the conditioning of demand for retail areas in the Orchard location. Based upon retail assets tracked by the consultancy, prime first-storey retail location on Orchard and Scotts Roadway observed the toughest rental development of 7.4% for the whole of 2022 to $39.20 psf each month. In the fringe together with suburban areas, leas grew by 6.7% in 2022 to $33.10 psf per month, while in some other city places, it increased by 3.7% to $19.20 psf per month, based on Edmund Tie’s information.

Knight Frank’s Hsu is also projecting prime retail leas to proceed expanding this year, indicating that the retail market is “in a far better setting now”, also considering the rise in the Goods and Services Tax (GST) furthermore an extra soft financial outlook. “As long as there are no measurements limits to celebrations and quarantine requirements for cross border arrivals, prime rentals of retail space are likely to expand in between 3% and 5% for all of the of 2023, with the prime shopping belt Orchard Road leading the recovery,” he forecasts.

The consultancy is anticipating prime first-storey retail rents in Orchard and Scotts Roadway to preserve its progression of between 7% also 9% in 2023, while rentals in other retail sub-markets are anticipated to expand in between 3% and 6%.

The M Condo showflat location

In its 4Q2022 market statement, Knight Frank indicates that prime retail rooms in the Orchard Road place blazed a trail in relations to rental growth, laying out a rise of 3.1% y-o-y in 4Q2022 to $29.10 psf monthly, followed by prime retail room in the Marina Centre, City Hall and Bugis sub-market which registered a development of 2.6% y-o-y to $23.90 psf each month. The rise in rents was supported by a boost in international traveler arrivings, along with the return of laborers went back to the workplace.

According to data put together by Knight Frank Research study, prime retail rents island-wide climbed 1.7% q-o-q in 4Q2022 to hit around $26.10 psf per month. This brings full-year prime retail leasing expansion to 2.6% for 2022.

Lam Chern Woon, head of research and consulting at Edmund Tie, projects a brighter year ahead for the retail real estate market, supported by the continued healing in the tourist field. “With the quantity of the source pipeline slated ahead onstream in 2023, including The Woodleigh Shopping center, and retail outlets at One Holland Village, Guoco Midtown along with IOI Central, the supply-demand dynamics are anticipated to be stabilized this year,” he adds.

Edmund Tie’s report also mentions that in 3Q2022, islandwide final absorption for retail spaces clocked in at 323,000 sq ft, a four-fold rise from the 86,000 sq ft signed up the past quarter, signalling reinforcing necessity.

The improvement of the Singapore retail store market gained force in the last part of past year, regards to social distancing measures being calmed and also boundaries resuming. “The retail industry withstood and has actually survived an exceptionally challenging period of unexpected difficulty, only starting to obtain grip from the clearing of steps from 2Q2022 ahead,” remarks Ethan Hsu, Knight Frank Singapore’s head of retail.


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