October 1, 2012
Jones Lang LaSalle's (JLL) latest report on the Singapore retail sector said that prime rents held steady in Q3 despite lowered retail sales and visitor arrivals.
Retail rents on Singapore's prime shopping district Orchard Road were seen to hold steady in the third quarter, averaging SGD 37.66 psf per month. This was despite weaker visitor arrivals and retail sales in the period, according to the latest report by JLL.
The real estate consultant said that in July, retail sales dropped by 0.7% year-on-year due to declines reported by jewellery, watches and departmental stores. This coincided with a 4.6% drop in visitor arrivals in May from the previous month, marking a second consecutive month of contraction.
However, retail rents were propped up somewhat by healthy leasing activity in the F&B industry, with new-to-market brands such as Abercrombie and Fitch, Tory Burch, Anne Fontaine and H&M also helping to support the market.
Said Hannah Macdonald, JLL's head of retail, "As the population matures and demands for greater product variety increases, the suburban sub-market is poised for a stunning transformation with the additional stock coming over the next four years."
"Retailers will also be able to tap into the spending power of the decentralised workforce when the global economy recovers from the current uncertainty," she added.
Rising competition from suburban retail centres has prompted a major revamp in Orchard Road, with major players including Plaza Singapura and Wisma Atria embarking on asset enhancement initiatives. Following suit are other landmark malls such as Pacific Plaza, Shaw Centre and The Heeren.
The shopping mecca may also see its retail area expand towards the west of Orchard Road, as the Urban Redevelopment Authority works on improving connectivity in the area.
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