Singapore retail scene: net demand to remain soft

RETAIL rents in Singapore have demonstrated a remarkable period of stability post-Global Financial Crisis (GFC), with average rents in both prime (Orchard) and suburban locations holding steady for nearly four years.

However, since their peak in early 2015, average retail rents have fallen by about 7.5 per cent for both prime and suburban ground floor, by 11.5 per cent for prime upper floors and by 10.5 per cent for suburban upper floors, going by official data and information compiled by DTZ.

While a soft economic environment and a negative "wealth effect" are cyclical factors that have contributed to this current retail rental downcycle, we note that the magnitude of the cycle-to-date decline is comparable to that seen during the GFC.