Orchard Road Rents Stable in Q3

FF Fashion

Sep 22, 2010
CommercialGuru.com.sg

Rents in the prime Orchard Road area remained stable at $31.10 psf in the third quarter, following seven quarters of decline, according to CB Richard Ellis (CBRE).

Rents in suburban malls also continued to improve due to strong catchment demand, with prime suburban rents increasing from $28.50 psf per month in Q2 to $29 psf per month in Q3 2010.

Overall, rents declined in Q3, except for rents in suburban malls and the prime Orchard Road area, said CBRE. It also stressed that the gap in rentals between prime Orchard and prime suburban space continued to narrow, from 12.6 percent and 8.2 percent in Q1 and Q2, respectively, to 6.6 percent in Q3.

“This trend is likely to continue as Orchard Road adjusts to the recent new supply as well as competition from the Integrated Resorts. We need to bear in mind that suburban malls have mass market appeal as they are strategically located with good transport connections; residential catchment in its immediate surroundings and as such are an attractive alternative to a large number of tenants,” said Letty Lee, director for retail services at CBRE.

CBRE also said that approximately 4.12 million sq ft of retail space is expected to be completed in Q4 2010 to 2015, of which 2.0 million sq ft will be completed in the next 15 months. These include Clementi Mall, the Phase 1 of Marina Bay Link Mall at Marina Bay, Orchard Xchange at Orchard MRT, Solaris at one-north and nex at Serangoon Central.