Rental demand for small retail units may weaken: DTZ

Singapore

WHILE the limited supply of strata-titled retail units available for sale is likely to help support the potential for capital appreciation in the long term, DTZ advises investors to be mindful that the rental demand for smaller retail units could be weaker amid the current tough operating environment, with competition from e-retailing as well as a labour crunch.

This is especially so from smaller retailers, who are likely to form the bulk of demand for such units.

Despite strata retail transactions being low this year following the implementation of the total debt servicing ratio (TDSR) framework in late-June 2013, capital values of strata retail space managed to rise by around 1.3 per cent in 2014 in both Orchard/Scotts Roads and the suburban areas. In the "other city areas" (including locations such as Bugis, Bencoolen Street, Bras Basah Road, North Bridge Road and Beach Road), strata retail capital val…