Central Singapore retail rents up 0.9% in Q2 as vacancy rates creep up: URA
Prices of retail space edge up 0.1% in the quarter
[SINGAPORE] Rents of retail space in Singapore’s central region rose 0.9 per cent in the second quarter of 2025, after having dipped 0.5 per cent in the first quarter, according to Urban Redevelopment Authority (URA) data.
And with several operators closing down, vacancy as tracked by the URA edged up to 7.1 per cent in Q2, from 6.8 per cent at the end of the previous quarter.
“Some businesses succumbed under the pressure of challenging operating conditions including rising rents and other operational costs, deteriorating retail sales arising from cautious consumers amid the tepid economic and employment outlook, keen online and in-store competition, unpopular retail concepts and changing consumer preference,” said JLL’s Angelia Phua, consulting director of research and consultancy (Singapore).
Vacancies in the Central Region were led by the Downtown Core, where several food and beverage operations shuttered in the second quarter.
Notable closures in the Central Region included the Prive outlet at 313@somerset and Harvey’s by Panamericana at CIMB Plaza.
“Many food and beverage operators were squeezed by rising costs. Intense competition and ongoing manpower constraints have turned the F&B landscape into a zero-sum game for many,” said Knight Frank research head Leonard Tay.
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While some brands consolidated operations, others expanded.
CBRE observed selective expansions across diverse sectors, with F&B operators such as Pizza Studio Tamaki, Huggs, and Xiao Yu Hao continuing to lead demand.
Fashion brands such as 2nd Street, Motherhouse, and Lovet expanded their footprint, while service providers including Emirates World, Nowhere Baths, and Dr Bags also grew their presence.
The suburban retail market remained resilient, supported by ongoing consumer demand and strong residential catchments, said Cushman & Wakefield’s research head of Singapore and South-east Asia, Wong Xian Yang.
So far this year, Luckin Coffee, Chagee, and Munchi Pancakes have expanded across several prime suburban malls, he said.
Occupier demand is expected to soften in the near term, said JLL’s Phua.
She said: “The intense retail competition and the double whammy of persistently high operating costs and deteriorating retail revenue, as consumers cut back on consumption amid the weak economic outlook and softer hiring conditions, are threatening retailers’ financial viability. This could dampen occupier demand in H2 2025.”
The weakened occupier outlook as well as retailer sensitivity to rent hikes amid a challenging, competitive, and uncertain operating environment could keep rents flat or cap rent growth.
Islandwide, the amount of occupied retail space fell by 16,000 square metres (sq m) net, a larger drop than the 12,000 sq m decrease in Q1.
Retail stock rose by 6,000 sq m net in Q2, significantly less than the 30,000 sq m increase in the previous quarter.
As at end-Q2, there was a total supply of about 527,000 sq m gross floor area (GFA) of retail space in the pipeline, up from 524,000 sq m in Q1.
Meanwhile, prices of retail space edged up 0.1 per cent in Q2, a smaller increase from the 1.9 per cent rise in Q1.
Investor appetite for both prime and suburban retail assets is likely to remain resilient however on tourism recovery and steady consumer spending and the easing of financing costs in Singapore, said Tricia Song, CBRE’s head of research for South-east Asia.
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