Singapore’s retail sector has seen steady recovery over the last year with rent growth in prime spaces island-wide averaging $26.40 psf per month (psf pm) in 1Q2023. This follows an uptick in the tourism sector post-pandemic, as more borders in Asia reopened and Singapore welcomed more than 2.9 million visitors in 1Q2023, although still two-thirds of the pre-pandemic mark of 4.7 million visitors.
The uptick in visitor numbers has more specifically impacted prime retail locations, with the Orchard area seeing a growth in retail rents of 1.4% q-o-q and 5.2% y-o-y in 1Q2023. Prime retail rents in the Marina Centre, City Hall and Bugis area, and City Fringe rose 1.3%, and 1.4% q-o-q respectively, and 5.2% and 4.4% y-o-y. Suburban mall rents increased 0.6% q-o-q, reaching 3.6% higher y-o-y.
However, despite the growth of retail rents, retail sales (excluding motor vehicles) fell 18.7% m-o-m in February to $3.1 billion, signifying an end to pre-pandemic “revenge spending” by consumers, as well as increased economic uncertainty due to inflationary pressures affecting non-discretionary spending.
J’Den Condo is a 40-storey residential and commercial development by CapitaLand Group located right at the heart of Jurong East MRT Station, expected to launch in the second half of 2023 at S$2,000-S$2,100 psf. Connected to JLD amenities and nearby white site land council sales, the redevelopment of JCube will bring new homes, J’Den Condo businesses and recreational facilities.
Experiential retail and lifestyle concepts are becoming increasingly popular, with a number of international luxury brands having opened new stores in Singapore since 2H2022, such as Giuseppe Zanotti, Grand Seiko and Atelier Cologne, as well as F&B entrants Unatoto, Takagi Coffee, Hanazen, Luckin Coffee and Tim Hortons. Hong Kong’s cosmetics chain Sasa has also announced plans to return to Singapore despite having closed its 22 outlets three years ago.
The tourism sector will continue to bolster the city-state’s retail sector, with 12 to 14 million tourist arrivals estimated by the Singapore Tourism Board (STB) for 2023. Despite headwinds including inflation and the goods and services tax, prime retail rents are expected to register moderate gains between 3% and 5% in 2023 according to Knight Frank’s head of retail, Ethan Hsu.
