Singapore retail sector finally out of the woods: Knight Frank

Prime retail rents grew 2.6% for full-year 2022.

According to a Knight Frank report, recovery in Singapore’s retail market was building momentum in compelling fashion in the latter half of 2022. 

“Shopper crowds, street activities, public events, vibrancy and a general buzz signalling that the worst of the pandemic is past, returned to the prime Orchard Road shopping belt, boosting sales of the businesses there. Especially so, in the holiday period during the final months of the year,” the report said.

Here’s more from Knight Frank:

Devoid of a regular stream of patrons for much of 2020 and 2021, alfresco and entertainment venues filled with customers who were deprived of the activities that such outlets and services provided. Coinciding with the festive season, Christmas trees and lights brightened up the streets, fostering footfall. 

Despite many Singaporeans travelling out of the city for the holidays, the uptick in local consumers and foreign visitors palpably signified global accord of a return to normalcy in an endemic world, ushering in a new wave of confidence for both retailers and landlords. 

With the retail sector finally out of the woods, at least for now, regardless of the looming economic headwinds, prime retail rents island-wide averaged S$26.10 psf pm, pointing to a 1.7% q-o-q increase in Q4 2022, and an overall 2.6% growth for the year (Exhibit 1). Suburban malls weathered the pandemic better than those in the Central Area. 

However with the world generally opening up and workers brought back to the office throughout 2022, it was the Orchard area that recorded the highest increase of 3.1% y-o-y to S$29.10 psf pm, followed by the Marina Centre, City Hall and Bugis regions with rents up 2.6% y-o-y at S$23.90 psf pm in the fourth quarter, as a result of the steady flow of international visitors.