Retail space rents fall by 0.3%, vacancy rate rises to 7.6%: URA

RETAIL rents fell by 0.3 per cent in the first quarter of 2023, a smaller dip compared to the 1.1 per cent decrease in Q4 2022, data released by the Urban Redevelopment Authority (URA) showed.

On Friday (Apr 28), URA said prices for retail space in the central region fell by 0.9 per cent, following a 2.1 per cent decrease in the previous quarter. 

On an islandwide basis, as at the end of Q1, there was a total supply of 407,000 square metres (sq m) of GFA of retail space from projects in the pipeline, down 3.1 per cent from 420,000 sq m as at the end of Q4 2022.

The amount of occupied retail space fell by 7,000 sq m net lettable area (NLA) in Q1, compared with an increase of 66,000 sq m NLA in the previous quarter. The stock of retail space increased by about 25,000 sq m NLA in Q1, a slightly larger increase than the 24,000 sq m rise in the previous quarter.

This resulted in the islandwide vacancy rate of retail space rising to 7.6 per cent as at end-March, from 7.1 per cent as at end-December.

Leonard Tay, head of research at Knight Frank Singapore, noted that the URA retail rental index has been in decline for three years since Q1 2020, culminating in an overall 22.6 per cent decrease in Q1 2023 compared to Q4 2019. However, average prime retail rents islandwide increased by 5 per cent in Q1 2023 year on year based on Knight Frank’s analysis of its own basket of retail properties.

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Retail space rents fall by 0.3%, vacancy rate rises to 7.6%: URA

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Analysts are hopeful that with the growing number of foreign visitors and the impending return of Chinese tourists, the retail market will make a recovery.