Singapore Retail Space Rents Rise 0.6% in Q2 2026 Reversing Prior Decline
Commercial Property | 25 Jul 2026
Retail Rents Rebound 0.6% in Q2 as Office Rents Also Turn Positive at 0.8%
Singapore retail space rents rose 0.6% in Q2 2026, reversing the previous quarter’s decline, even as the vacancy rate edged up to 6.5% from 6.3%. Central area retail rents improved significantly, swinging from a 0.6% drop to a 0.6% rise. Office rents also turned positive, gaining 0.8% in Q2 after declining 0.2% in Q1, with net absorption more than doubling.
Retail Rent Growth
Retail Vacancy
Office Rent Growth
Office Vacancy
Retail Rents Reverse Course Despite Higher Vacancy
URA data released on 24 July showed retail space rents grew 0.6% in Q2 2026, despite the island-wide vacancy rate edging up 0.2 percentage points to 6.5%. The central area retail space rental index improved notably, rebounding from a 0.6% decline to a 0.6% increase.
Cushman & Wakefield’s Huang Xianyang noted that the coexistence of rising vacancy and rental growth reflects active tenant turnover. “Due to cost pressures, underperforming retailers are exiting the market, while new entrants and retail concept expansions continue to support rental levels, particularly for well-located retail assets,” he said.
Knight Frank’s Zheng Weiming highlighted several F&B closures in Q2, including Jumbo Seafood at East Coast Seafood Centre, Lion City Meadery’s flagship, Tim Ho Wan at HarbourFront Centre, and other retailers, mainly driven by cost and operational pressures. Meanwhile, foreign brand expansion, including Holland & Barrett, and earlier entrants to Singapore’s high-street locations, continue to sustain demand.
Office Rents Rise 0.8% as Net Absorption Doubles
Office rents also turned positive in Q2, rising 0.8% after declining 0.2% in Q1. Net absorption of office space in Q2 reached about 19,000 square metres (approximately 204,440 square feet), more than double Q1’s 8,000 square metres. However, the overall office vacancy rate climbed to 11%, mainly due to the completion of Shaw Tower in the city centre.
Huang noted that about 60% of Shaw Tower’s space is already in the negotiation stage. As leasing activities continue, vacancy is expected to gradually decline. He projected central CBD Grade A office rents to increase 4% to 5% for the full year.
Knight Frank’s Zheng noted that golden shoe district supply of layered office buildings remains limited, and both office demand and prices should be well supported. He projected full-year retail rents to increase 2% to 4%, supported by stable tourist arrivals, higher per capita spending, and government household shopping vouchers in the second half.
Frequently Asked Questions
How much did retail rents rise in Q2 2026?
Retail space rents rose 0.6% in Q2 2026, reversing the previous quarter’s decline. Central area retail rents improved significantly, swinging from a 0.6% drop to a 0.6% increase. The overall retail vacancy rate edged up to 6.5% from 6.3%.
What drove the office rent recovery?
Office rents rose 0.8% in Q2 after declining 0.2% in Q1. Net absorption more than doubled to about 19,000 square metres. The overall office vacancy rate climbed to 11% mainly due to the completion of Shaw Tower, but about 60% of its space is already in negotiations.
What is the rental outlook for retail and office space?
Analysts project retail rents to grow 2% to 4% for the full year, supported by tourism and government vouchers. Central CBD Grade A office rents are projected to rise 4% to 5%, with limited supply in prime districts supporting prices.
Why are retail vacancies rising alongside rents?
The coexistence of higher vacancy and rising rents reflects active tenant turnover. Underperforming retailers are exiting due to cost pressures, while new entrants and concept expansions by established brands continue to support rental levels at well-located properties.
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