‘Mixed signals’ in retail leasing market: CBRE

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

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