Average rentals of prime retail space in Orchard/Scotts Road and suburban areas stayed constant in the second quarter of 2013, following a slight dip in the previous quarter.
DTZ said prime retail rents in Orchard/Scotts Road are expected to fall marginally in the second half of the year as new developments in the area are completed.
Together, the completion of Orchard Gateway and the addition and alteration works at Shaw Centre later this year are expected to add around 4.5 per cent of total land stock in the area.
Meanwhile, rentals of equivalent prime retail spaces in other parts of the city declined for the third consecutive quarter, falling by 0.3 per cent quarter-on-quarter in the second quarter.
Anna Lee, DTZ’s director of retail, said: “The Marina Centre area is slowly transforming with the renovation works at Suntec City Mall and Marina Square. These developments have attracted strong anchor tenants which will be able to draw more shoppers.
“This may be an opportune time for tenants to start securing prime retail space now as rents may start to pick up with shoppers returning to this area.”
In projects across Singapore, approximately 71 per cent of total pipeline supply in 2013 or 1.3 million square feet of retail space is expected to be completed in the second half of the year. .
Meanwhile, resale price growth of prime retail spaces in all regions was weaker in the second quarter compared to the first quarter of the year.
Among the regions, resale of prime retail space in Orchard/Scotts Road and suburban areas grew more strongly than other areas.
The average capital value of prime resale retail units in Orchard/Scotts Road rose by 2.6 per cent in the second quarter.
This is compared to a smaller 1.6 per cent increase in the average capital values of prime resale retail units in other city areas.
Lee Lay Keng, DTZ’s head of Singapore research, said: “Owners of retail units in the prime retail belt have high holding power and are unwilling to sell these units without a premium.
“On the other hand, in the suburban areas, new launches such as Pavilion Square and The Midtown continue to set new benchmark prices, supporting the price growth of existing strata units in the area.”
Source – CNA – 24 jun