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Retail rents to show minimal drops: DTZ

Posted on 6 Oct 2009 | Comments Off

Although investment activity has risen, retail spending remains weak

PROPERTY consultancy DTZ expects retail rents to drift ‘with minimal declines’ for the rest of the year and in 2010.

The firm’s head of South-east Asia research Chua Chor Hoon said: ‘Although investment activity has risen, retail spending remains weak and depends on the extent of economic recovery.’

More retail space has been coming onstream in Singapore as the economy struggles to pick up. Around 486,000 square feet of space – mainly in City Square Mall, Kitchener Road – was completed in the third quarter of this year. And more than 500,000 sq ft could be available in Q4.

The total amount of retail space completed this year will be around 2.6 million sq ft – a historic high, said DTZ.

But the situation is not altogether bleak. ‘Although retailers remain cautious about expansion, leasing activity is selectively active,’ said DTZ’s associate director of retail, Anna Lee. ‘F&B retailers have been more active in leasing enquiries, as consumers are more willing to spend on food than on fashion apparel.’

DTZ also found that the number of shop transactions in the first two months of Q3 surpassed those in Q2 and was close to the number in Q2 2008 – before the financial crisis.

In Q3, prime first-storey rents in Orchard Road and Scotts Road dropped only marginally as new malls drew both new and existing brands, raising take-up rates. From $39.50 per sq ft per month (psf pm) in Q2, rents eased just 0.5 per cent to $39.30 psf pm over a quarter.

Capital values in the area have remained unchanged for two consecutive quarters.

Prime first-storey rents in suburban areas were steady at $33 psf pm in Q3, the same as in the previous quarter. Capital values in these areas also rose one to 3 per cent.

According to DTZ, suburban malls continue to enjoy healthy levels of occupancy and there is still a queue of eager tenants. Some of these retailers are moving from areas that have smaller residential catchments.

Source : Business Times – 6 Oct 2009

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Posted in Office / Retail / Industrial

Tagged Retail Rental, Retail Space, Singapore Retail

Main St rents feeling the blues

Posted on 24 Sep 2009 | Comments Off

But slowdown shows signs of abating in Asia-Pacific

MORE than half the world’s most expensive shopping streets have seen prime retail rents slump in 2009 – marking the biggest fall in retail rents in 24 years – a recent report from real estate adviser Cushman & Wakefield showed. Some 54 per cent of the 274 main streets across 60 countries monitored by Cushman & Wakefield saw prime rents fall in 2009.

New York’s Fifth Avenue remained the world’s most expensive street, though prime rents dropped 8.1 per cent to US$1,700 per square foot per year, Cushman & Wakefield said. Fifth Avenue has been the world’s most expensive street for the last eight years. It was followed by Hong Kong’s Causeway Bay, which showed a 15.1 per cent fall in rents to US$1,525 per square foot per year, while rents in Paris’ Avenue des Champs Elysees were static at US$1,009.

Cushman & Wakefield’s global head of retail, John Strachan, said the past year was one of the most difficult for the sector, with consumer spending and retail sales down in many markets.

‘The good news, however, is that the worst is almost certainly now behind us,’ Mr Strachan said in a statement, adding the annual survey’s findings represented the biggest global fall in retail rents in its 24-year history. ‘There will undoubtedly be some markets which will continue to be affected over the next year but we expect to see a greater number move back into positive territory,’ he said. Continue reading →