Rents in Orchard Area Edge Up

FF Fashion

Sep 28, 2011
CommercialGuru.com.sg


Retail spending in Singapore remained high in July, fuelled by strong tourist arrivals and low unemployment, according to DTZ Research.

Data released by the Department of Statistics showed that retail sales, excluding motor vehicles, surged 1.3 percent month-on-month and 10.7 percent year-on-year in July.

DTZ estimated that the average gross fixed rent of prime first storey-space in the Orchard / Scotts Road area climbed 0.5 percent quarter-on-quarter to S$40.20 psf per month in the third quarter, attributed to the completion of Scotts Square in Q3, the only new development in the Orchard / Scotts Road area this year.

“With international retailers moving away from their home base to expand operations in Asia, the Singapore retail landscape has become more competitive. Besides new brands such as H&M and Aeropostale, brands such as Mulberry and Smiggle which have already set up base in Singapore also plan to open more stores here,” said Anna Lee, Director for Retail at DTZ.

New retail completions in the third quarter include Rochester Mall, Changi City Point, 112 Katong and Scotts Square, which have added a total net lettable area (NLA) of approximately 510,000 sq ft to the stock. Around 32 percent of the total potential supply for this year will come on-stream in Q4, with major projects to be completed by end-2011 including Junction 10, Greenwich V and Alexandra Retail Centre (ARC) at the PSA Building.

Meanwhile, the report also noted that the average gross fixed rent of prime first-storey space in both suburban areas and the city remained unchanged in Q3, at around S$33.70 psf and S$24.05 per month respectively. Demand for space in suburban malls, particularly in HDB town centres, remained strong, with Jcube and Changi City Point witnessing pre-commitment rates of over 80 percent and 90 percent respectively.

“As the economic outlook has deteriorated, some retailers have already become more cautious in taking up new space,” said Chua Chor Hoon, DTZ Head of SEA Research.

“Retail rents are expected to move along sideways, barring a drastic turn in the economic situation. While facing headwinds from the oncoming potential supply, retail rents will be supported by demand from international retailers and asset enhancement initiatives of malls to increase their appeal to shoppers,” she added.