Singapore’s retail leasing market remained active in the first half of this year, underpinned by stable economic growth, a low-unemployment rate and healthy consumer spending.

According to property consultants, CB Richard Ellis, the monthly average rent for Prime Orchard Road space remained at $30.10 per square foot per month in the second quarter, unchanged from the previous quarter.

On the whole, Prime Orchard Road rents contracted marginally by 0.5 per cent in the first half of the year.

Prime Suburban rents dipped to S$28.90 per square foot per month in the second quarter compared to S$29.10 per square foot per month in the previous quarter, possibly due to competition from imminent supply.

For the first half of 2011, Prime Suburban rents declined by 0.7 per cent.

CBRE said the government has been ensuring a steady flow of retail supply pipeline is made available in the suburban and decentralised regions.

It estimates confirmed retail supply totals about 4.3 million square feet in the next four years and beyond.

Of this, 13.2 per cent or 566,000 square feet will be located in Orchard Road – a quantum that is less than the total net lettable area of the recently completed Nex mall at Serangoon Central.

CBRE said the bulk or 55.2 per cent of retail supply will be completing in the suburbs.

Notably, some 1.2 million square feet will be coming up within the 1-km radius range from the Jurong East MRT station by 2015.

This will come from Lend Lease’s project, CapitaLand’s Boon Lay Way project and JCube as well as ancillary retail space within the Jurong Hospital.

This would effectively boost the private retail stock in the Jurong East area from about 900,000 square feet currently to 2.1 million square feet, reflecting an increase of 132 per cent.

For comparison, Tampines Central in the east has about 1.1 million square feet of mall space.

CBRE said it may be timely for the government to take note that the 10-year take-up for retail space islandwide averaged 352,000 square feet per annum and as such, to adjust the supply flow accordingly.

CBRE’s director for retail services, Letty Lee said her firm remains positive about the eventual take-up rate at Jurong Gateway, given that retail demand is somewhat supply-led locally.

But she added there are concerns about pressures on suburban rents given the increase in supply.

However, Ms Lee said well-managed malls and necessity trades should continue to flourish and as such, retailers could also take the opportunity to expand their retail network.

Source : Channel NewsAsia – 30 Jun 2011

The retail leasing market gave mixed signals in Q1 2011, said property consultants CB Richard Ellis (CBRE).

It said monthly rents for prime Orchard Road averaged S$30.10 psf per month in the first quarter, reflecting a decrease of 0.5 per cent from a quarter ago. Prime suburban rents remained at S$29.10 psf per month, unchanged from the previous quarter.

A few major leasing deals were concluded in the quarter as well as the exit of an anchor tenant along Orchard Road.

Knightsbridge announced that it is fully – let as it secured Abercrombie & Fitch for 21,000 sq ft of multi-level space. This store, which will open in Q3 2011, will be the second largest flagship in Singapore after H&M’s 32,300 sq ft outlet at Orchard Building.

A new-to-market American ice cream chain, Cold Stone Creamery, opened a 1,300 sq ft outlet at Orchard Central. The 52-seat flagship store features an open kitchen concept.

Ms Letty Lee, director of retail services, said: “It is likely that prime retail rents along Orchard Road would continue to soften in the near- to-medium term as recent completions along Orchard Road have not been digested and rental re-negotiations at some of these malls are imminent.”

CBRE said the retail investment market remained strong, with 80 caveats lodged from Jan 1 until the first week of last month. Although not all the caveats for the quarter have been registered, the current tally has exceeded the volume of 75 caveats lodged in Q1 2010.

PoMo, previously known as ParadizCentre, was sold to CLSA for S$255 million, reflecting an average S$1,400 psf over the entire net lettable area (NLA) of the development which comprises retail, office as well as civic and cultural space.

CapitaMall Trust bought Iluma from Jack Investment at S$295 million or S$1,593 psf based on a NLA of 185,190 sq ft.

The investment transaction that commanded the highest quantum in Q1 2011 was the sale of the Lion City Hotel and the adjoining Hollywood Theatre site at S$313 million. The buyer, UOL Group, is waiting for approval to either develop the site into a mixed residential and commercial complex or a residential development with commercial element on the first storey.

Raffles Medical Group (RMG) bought a seven-storey freehold podium block at Thong Sia Building for S$92.08 million in February. This reflected S$2,158 psf based on a strata floor area of 42,668 sq ft.

It would be interesting to follow the development of this area, marked by Parkway’s Mount Elizabeth Hospital and Medical Centre, RMG’s new medical centre at Bideford Road and a multi-tenanted Paragon Medical above the Paragon mall.

Currently, the area is already a vibrant medical hub, very accessible to patients residing in the surrounding districts of nine, 10 and 11.

Ms Lee said: “With improving macroeconomic conditions in the region contributing to a recovery in foreign patient arrivals, this medical cluster is likely to thrive, catering to a niche group of customers who seek medical treatment in an alternative country”.

Source : Today – 1 Apr 2011

Rents along Orchard and Scotts Road edged higher in the fourth quarter after staying flat for four straight quarters.

According to real estate consultancy DTZ, the average gross rent of first-storey space in the Orchard/Scotts Road area increased by a marginal 0.3 per cent or 10 cents on-quarter to S$39.80 per square feet per month.

DTZ said there will be very little new supply coming on-stream in 2011 and 2012 along the premier shopping belt, giving rents a boost as demand starts to catch up with supply.

It added that the increase shows that retailers are optimistic of business prospects following the economic recovery, and the area continues to attract both existing retailers and new ones such as Swedish giant H&M.

Meanwhile, rents in other city areas fell for the third consecutive quarter due to supply pressure.

DTZ said the average rent in other city areas eased by 0.8 per cent in this quarter to S$23.90 per square feet per month.

It added that the drop follows the opening of The Shoppes at Marina Bay Sands, Marina Bay Link Mall, Esplanade Xchange and other additions at Raffles City.

Source : Channel NewsAsia – 20 Dec 2010

Rentals for primary, secondary and suburban shopping areas in Singapore are expected to remain stable with some marginal upside over the next 12 months, according to the latest report from Jones Lang LaSalle.

It said vacancies of retail space are likely to stabilise as the market finds its equilibrium one year on, from the large addition of supply along Orchard Road.

The property consultant noted that Singapore’s retail sales index has been trending upward since the second quarter of last year, with retail sales showing an increase of 6 per cent year-on-year in July.

Demand was reinforced by rising visitor arrival numbers.

Overall, Jones Lang Lasalle said prime retail markets in Singapore, Bangkok, Kuala Lumpur and Jakarta have moved to the upturn phase of the rental cycle, and can expect some growth in both rental values and capital values over the next 12 months.

It said the stronger consumer confidence, as we move into the year-end festive season, will help to underpin demand for retail space across Southeast Asia.

Source : Channel NewsAsia – 29 Nov 2010

Property consultant DTZ said the average prime rental rates along Orchard Road and Scotts Road remained unchanged in the third quarter.

For the third straight quarter, gross rents of prime first-storey space in the Orchard Road and Scotts Road area stayed at S$39.70 per square foot per month.

Rents in other city areas fared worse as they continued to decline.

Prime first-storey rents in other city areas fell by 0.8 per cent to S$24.10 per square foot per month in the third quarter.

Monthly gross rents of prime first-storey retail space in the suburban malls, meanwhile, were unchanged at S$33.60 per square foot per month.

DTZ said the new supply of retail space last year has led to a competitive environment, which does not support any increase in rentals.

Some 1.3 million square feet of new retail space came on-stream last year.

Other than the newly completed and pipeline supply which have put a lid on rental increase, DTZ said the two new integrated resorts have also had an impact.

It noted the IRs have siphoned off some demand for shopping as more people spend time and money at the casinos instead of at the malls.

But with a robust economic recovery taking place, DTZ said retail rents should increase gradually next year as the new supply are eventually absorbed.

Source : Channel NewsAsia – 4 Oct 2010

Rental for prime Orchard Road locations remained stable at about S$31.10 per square foot in July and September after contracting for the last seven quarters.

Property consultancy CB Richard Ellis (CBRE) said rent in suburban malls however continued to strengthen.

It said this is because of a strong catchment demand.

Prime Suburban rents rose to S$29 per square foot, per month between July and September this year.

This is a slight increase from the S$28.50 per square foot, a quarter ago.

CBRE said retail rents went down overall in the third quarter, except for rents in prime Orchard Road and suburban malls.

It also pointed out that the difference in rentals between prime suburban and prime Orchard space continued to narrow.

In the first three months of the year, the gap decreased further by 12.6 per cent, going down to 8.2 per cent in the second quarter.

And in this third quarter, it was just a 6.6 per cent difference.

CBRE added that 4.12 million square feet of retail space is likely to be completed over the next five years.

Of which, just under 2 million square feet will be completed in the next 15 months.

These include Phase One of Marina Bay Link Mall at Marina Bay and Clementi Mall.

CBRE said retailers and landlords are now gearing up for the Formula One race from September 24 to 26 and the year-end festivities.

It added that retailers are generally more optimistic about operating conditions for the remainder of the year.

This is because of increased spendings at the Great Singapore Sale and contributions from higher tourist arrivals.

Source : Channel NewsAsia – 21 Sep 2010

Retail rents for underground malls in the city could rise by between 20 and 40 per cent in the years ahead, as the Government roll out plans to improve the rail network, according to some analysts.

With the Land Transport Authority set to spend $60 billion over the next decade on initiatives to ease passenger congestion, market watchers said the move could also direct more traffic to underground malls.

Around 1.7 million commuters have been taking the MRT as of July – up by 24.7 per cent compared to 2008.

With new plans to enhance the rail network, analysts expect ridership numbers to go up further and could provide some upside for retail rentals.

“Certainly I think rents will go up, it is always in proportion with the traffic flow. Landlords will always think that with greater traffic, tenants will enjoy better business,” said Charles Ng, director of retail at Colliers International.

To justify the rent increase, analysts said landlords may have to step up marketing efforts and improve mall layout to drive more shoppers through the mall.

Retailers on their part should spruce up their shop front displays and use commercial space more efficiently.

Currently, the average rent for retail space at underground malls works out to about $15 per square foot.

“There’s a significant mass of retailers that are occupying spots in MRT stations. So I see some opportunity for them to band together to offer some sort of promotions and deals to attract shoppers and to attract people to start viewing MRT station malls as a shopping venue as well,” said Mr Lin Jinshu, investment analyst at SIAS Research.

Experts also suggest a more diverse tenant mix at underground malls to cater to passengers on-the-go. These include supermarkets and more food and beverages outlets.

Of the underground malls in the city, market watchers expect rentals at CityLink Mall to rise more sharply compared to Xchange malls located at MRT stations mainly due to its convenient layout and higher volume of pedestrian traffic.

“It has a lot to do with configuration. If you look at Dhoby Ghaut and Tanjong Pagar Xchange, commuters can just walk through without having a look at the shops,” Mr Ng said.

“At CityLink Mall, to get from point A to point B, invariably we have to pass by the shops. That’s where I think that rents will see a difference,” Mr Ng added.

Source : Today – 13 Oct 2010

Some analysts have said retail rents for underground malls in the city could rise by between 20 and 40 per cent in the years ahead, as the Singapore government rolls out plans to improve the rail network.

The Land Transport Authority will spend S$60 billion over the next decade on initiatives to ease passenger congestion.

Market watchers added that the move could also direct more traffic to underground malls.

As of July, about 1.7 million commuters ride on MRT trains everyday.

That is up by 24.7 per cent compared to 2008.

With new plans to enhance the rail network, analysts expect ridership numbers to go up further. And this could point to some upside for retail rentals.

Charles Ng, who is director of retail at Colliers International, said: “Certainly I think rents will go up; it is always in proportion with the traffic flow. Landlords will always think that with greater traffic, tenants will enjoy better business”

To justify the rent increase, analysts said landlords may have to step up marketing efforts and improve mall layout to drive more shoppers through, while retailers should spruce up their shop front displays and use commercial space more efficiently.

Currently, the average rent for retail space at underground malls works out to about S$15 per square foot.

Lin Jinshu, an investment analyst at SIAS Research, said: “there is a significant mass of retailers that are occupying spots in MRT stations. So I see some opportunity for them to band together to offer some sort of promotions and deals to attract shoppers and to attract people to start viewing MRT station malls as a shopping venue as well.”

Experts also suggest a more diverse tenant mix at underground malls to cater to passengers on the go.

These include supermarkets and more F&B outlets.

Among the underground malls in the city, market watchers expect rentals at CityLink Mall to rise more sharply compared to Xchange malls located at MRT stations.

They said that is mainly due to its convenient layout and higher volume of pedestrian traffic.

Mr Ng said: “It has a lot to do with configuration. If you look at Dhoby Ghaut and say Tanjong Pagar Xchange, commuters can just walk through without having a look at the shops. This is unlike say CityLink Mall. Everybody has to walk through from point A to point B; invariably, we have to pass by the shops. That is where I think that rents will be a difference.”

Source : Channel NewsAsia – 9 Sep 2010

Rental values for retail space across Singapore ended on a mixed note in the second quarter of this year.

That’s according to estimates by property consultancy DTZ Research.

The report found that retail rents at Orchard and Scotts Road stood unchanged for the second consecutive quarter, as the performance of retailers was mixed in light of new supply that came on-stream since last year.

Gross rents of prime first-storey space in the Orchard and Scotts Road area remained at S$39.70 per square foot per month while upper-storey retail space rents stayed at S$20.50 per square foot per month.

But gross rents in other city areas contracted – as more than 815,000 square feet of space was completed in the quarter in areas outside of Orchard and Scotts Road.

Most of the new supply came from The Shoppes at Marina Bay Sands.

Prime first-storey rents in other city areas fell marginally by 0.4 per cent in the second quarter compared with the previous three months to S$24.30 per square foot per month.

Meanwhile rents for upper-storey space dipped 0.7 per cent on-quarter to S$13.90 per square foot per month.

In contrast, rents in the suburban areas edged up in the quarter, with suburban malls performing better than the city malls.

Monthly gross rents of prime first-storey retail space in the suburban malls rose marginally by 0.3 per cent to S$33.60 per square foot per month.

Upper-storey rents in this category inched up 0.4 per cent on-quarter to S$22.90 per square foot per month.

Source : Channel NewsAsia – 22 Jun 2010