Singapore overall prime retail rents up 4.3% in Q3  | Real Estate Asia

Singapore overall prime retail rents up 4.3% in Q3 

Marina Centre, City Hall, and Bugis registered the highest annual growth of 5.3%.

According to a Knight Frank report, in the first nine months of 2023, the Singapore Tourism Board (STB) reported a total of around 10.1 million visitor arrivals, with more than a million each month for seven consecutive months from March to September. 

Although the numbers have not yet achieved the pre-pandemic monthly average of 1.5 million visitor arrivals, there is positive momentum that is steadily building. 

Here’s more from Knight Frank:

The third quarter of 2023 registered a total of approximately 3.9 million visitor arrivals, which is an increase of 72.5% y-o-y, and 14.5% q-o-q. Visitor arrivals typically increase in the second half of the year with more large-scale public events such as the National Day Parade in August, the Formula One Singapore Grand Prix night race and Singapore River Festival in September as well as the year-end holiday festivities. 

The average gross rent of prime spaces island-wide increased 1.1% q-o-q and 4.3% y-o-y to S$26.70 psf pm in the third quarter of 2023 (Exhibit 1), improving over the 0.5% q-o-q growth in the previous quarter. Prime retail rents in all micromarkets grew by more than 5% y-o-y, except for the suburban areas that registered a more moderate growth of 0.6% y-o-y, after having recovered much earlier than the retail spaces in the more central areas of the island. Nevertheless, suburban prime retail rents expanded the most on quarter with a 2.1% increase to S$25.90 psf pm.

Going forward, retailers will continue to evolve and adopt new tools to obtain trend-based competitive advantages over competitors for the attention and spending dollar of consumers. With the increasing visitor arrivals, the remaining three months of 2023 will likely see the retail market consolidating the improvements achieved since Singapore opened its borders, culminating in year-end activities to wrap up a largely positive and eventful year. 

Barring any unforeseen global or regional upheaval, and notwithstanding the uncertain economic outlook, the retail sector in Singapore remains firmly on course to strengthen in 2023 and into early 2024. Prime retail rents should stay the course, increasing between 3% to 5% for the whole of 2023.



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