According to analysts, the poor momentum in retail spending, falling visitor arrivals, and determined resistance from tenants, as well we competition among malls, led to a further easing of retail rents island-wide in Q2 2015.
“Visitors arrival fell 6.1 percent in Q1 2015 and 0.5 percent in Q2. Retail sales excluding motor vehicles have fallen by 0.7 percent year on year. Rental have fallen for the second consecutive quarter. The rest of City Area rents have fallen the most by 0.7 percent as compared to the Orchard Planning Area (0.4 percent) and Outside Central Area (0.3 percent). Island-wide vacancy rate in the Downtown Core. The Outside Central Area continues to stay resilient with the lowest vacancy rates,” shared Wong Xian Yang, research and consultancy manager at OrangeTee.
While most industry watchers expect the retail outlook for the rest of 2015 to remain challenging, with competitive pressure and cost demands weighing heavily on F&B and retail operators, some analysts remain optimistic about the outlook moving forward, with global retailers and brands still keen to established and expand their footprint in the Singapore market.
“The retail market is largely dependent on the general state of the economy. As retail rentals are weakening now, agents can convince their clients that this may be a good opportunity to lock in attractive locations for their business at lower prices” according to Francis Tan, Chief Investment Officer of SLP Scotia Pte Ltd.
Upcoming new retail spaces in the Core Central Region will include City Gate near Beach Road.
Source: Propertyguru News