Retail rents end five consecutive quarters of declines with 0.3% q-o-q growth in 2Q2023

The retail sector in Singapore experienced significant growth in the second quarter of 2023, with a net absorption of 290,520 sq ft, reversing a contraction in the previous quarter. This was driven by numerous new retail openings, including international luxury brands and new food and beverage entrants. The opening of The Woodleigh Mall also contributed to the healthy demand for retail space. Rental growth increased prices as investors favoured quality retail assets, particularly suburban malls. Demand for retail space improved across all geographic segments, with Orchard Road recording the most significant improvement. Occupancy rates in Orchard Road and Central Area increased, leading to a rise in both retail prices and rents. Retail rents in the Orchard Road area are expected to grow due to new-to-market and luxury brands setting up shop there. However, economic uncertainties and high costs may continue to impact consumer confidence and overall market volatility.

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