Tag Archives: Retail Rental

Retail rents hold steady despite new supply

RETAIL rents across most of Singapore held steady in the first quarter of this year, a new report showed.

This ended five straight quarters of decline in some areas, as tourist arrivals grew and consumer confidence rose, according to the report by DTZ Research.

In the premier shopping belt of Orchard Road/Scotts Road, retail rents remained constant as the market absorbed new supply that came onstream in the first quarter of this year.

Gross rents of prime first- and upper- storey retail space in this area stayed at $39.70 and $20.50 per sq ft (psf) a month respectively in the first quarter.

More supply is due this year, though the estimated 2.3 million sq ft of new retail space expected this year is 15 per cent less than the historic high of 2.7 million sq ft last year, according to DTZ Research. A flurry of activity last year saw the addition of prime Orchard Road malls such as Ion Orchard, Orchard Central, 313@Somerset and Mandarin Gallery.

This year’s new supply will include the space at The Marina Bay Shoppes, Nex in Serangoon Central, Knightsbridge at Grand Park Orchard hotel, Bedok Point and Clementi Mall.

Retail rent in other city areas – Marina and Bugis, Beach Road, Bras Basah and North and South Bridge Roads – held steady after five straight quarters of decline. Gross rents of prime first- and upper-storey retail space in these areas stabilised at $24.40 psf and $14 psf per month.

In suburban areas, retailers’ resistance to high rents was reflected in a marginal drop of less than 3 per cent during last year’s downturn, said DTZ Research.

Monthly gross rents held firm in the first quarter at $33.50 psf a month for prime first-storey suburban space and $22.80 psf a month for upper-storey suburban space.

At the end of the first quarter, islandwide retail space stood at 32.8 million sq ft, with the completion of TripleOne Somerset, Scape in the Orchard area and Festive Walk at Resorts World Sentosa.

‘As tourist arrivals are expected to grow and local consumption improves, demand for retail space is likely to increase,’ said Ms Chua Chor Hoon, head of DTZ South-east Asia research.

‘On the back of a brighter outlook for the retail industry, prime retail rents are expected to rise moderately by around 2per cent to 5 per cent this year.’

Source : Straits Times – 23 Mar 2010

Retail rents stay steady across island

RETAIL rents in the prime Orchard and Scotts roads belt, other city areas and the suburbs were all unchanged in the first quarter of this year, according to DTZ Research.

They are still down as much as 10 per cent in some areas from their Q3 2008 peaks, but have now stabilised across the island, DTZ’s data show.

In Q1, the gross rent for prime first and upper-storey retail space in the Orchard and Scotts belt remained at $39.70 per sq ft per month (psf pm) and $20.50 psf pm respectively.

DTZ says the market managed to absorb new supply – from the opening of Ion Orchard and 313@somerset – that came on stream in 2009 and in Q1 this year.

First-storey rents in the Orchard and Scotts belt are down about 6 per cent from the peak at Q3 2008.

Rents in ‘other city areas’ took an even bigger hit during the economic slowdown, falling about 10 per cent from Q3 2008.

But the slide has stopped after five consecutive quarters of decline. Prime first and upper-storey retail space in these areas remained at $24.40 and $14.00 psf pm in Q1 2010.

Rents in suburban areas, which fell only marginally during the downturn, also held firm during Q1 – at $33.50 and $22.80 for first and upper-storey space respectively.

According to Chua Chor Hoon, head of DTZ’s South-east Asia research team, the retail industry has been boosted by more tourist arrivals and rising consumer confidence this quarter.

‘As tourist arrivals are expected to grow and local consumption improves, demand for retail space is likely to increase,’ Ms Chua says. ‘On the back of a brighter outlook for the retail industry, prime retail rents are expected to rise moderately.’

DTZ expects some 2.3 million sq ft of new retail space to be added this year, 15 per cent lower than the 2.7 million sq ft added in 2009.

Source : Business Times – 23 Mar 2010