Prime retail rents to see further recovery in 2023, with Orchard Road leading the way
A different report by Edmund Tie Research also highlights records even more pointing to the fortifying of need for retail spaces in the Orchard area. Based upon retail possessions tracked by the consultancy, prime first-storey retail location on Orchard and also Scotts Roadway saw the toughest rental buildup of 7.4% for the whole of 2022 to $39.20 psf each month. In the edge and suburbs, leas expanded by 6.7% in 2022 to $33.10 psf each month, while in various city places, it grew by 3.7% to $19.20 psf each month, based on Edmund Tie’s information.
The consultancy is forecasting prime first-storey retail rents in Orchard and Scotts Road to maintain its growth of between 7% and 9% in 2023, even though leas in other retail sub-markets are expected to expand in between 3% as well as 6%.
In its 4Q2022 market statement, Knight Frank notes that prime retail areas in the Orchard Roadway area led the way in terms of rental growth, laying out a rise of 3.1% y-o-y in 4Q2022 to $29.10 psf monthly, adhered to by prime retail room in the Marina Centre, City Hall and even Bugis sub-market which signed up a development of 2.6% y-o-y to $23.90 psf per month. The rise in leas was maintained by a boost in global visitors arrivals, in addition to the return of laborers went back to the workplace.
Edmund Tie’s report even explains that in 3Q2022, islandwide net absorption for retail spaces appeared at 323,000 sq ft, a four-fold surge from the 86,000 sq ft enrolled the past quarter, signalling reinforcing necessity.
The recovery of the Singapore retail industry market acquired momentum in the last half of previous year, thanks to social distancing measures being soothed and also boundaries resuming. “The retail industry withstood and has come through an incredibly hard moment of unprecedented difficulty, only beginning to gain traction from the removal of procedures from 2Q2022 ahead,” comments Ethan Hsu, Knight Frank Singapore’s head of retail.
According to records compiled by Knight Frank Research study, prime market rents island-wide climbed up 1.7% q-o-q in 4Q2022 to hit an average of $26.10 psf monthly. This carries full-year prime retail leasing growth to 2.6% for 2022.
Lam Chern Woon, head of research and consulting at Edmund Tie, expects a more vibrant year forward for the retail estate market, sustained by the continued healing in the tourist sector. “With the bulk of the supply pipeline slated ahead onstream in 2023, consisting of The Woodleigh Mall, and even retail outlets at One Holland Village, Guoco Midtown as well as IOI Central, the supply-demand characteristics are anticipated to be balanced this year,” he includes.
Knight Frank’s Hsu is also forecasting prime retail rentals to carry on increasing this year, mentioning that the retail industry sector is “in a much better placement right now”, also thinking about the boost in the Goods and Services Tax (GST) and also an extra muted economic outlook. “So long as there are no size controls to gatherings along with quarantine responsibilities for cross border arrivals, prime rentals of retail space are likely to grow between 3% and 5% for the whole of 2023, with the prime purchasing belt Orchard Road leading the improvement,” he anticipates.
