Singapore’s famed shopping street, Orchard Road, has been ranked 25th most expensive in the world this year.
With rents of retail space averaging at S$462.43 per sq ft a year, this is a notch up from last year against 129 cities in a study conducted by Colliers International.
New York’s Fifth Avenue and Hong Kong’s Queen’s Road Central and Canton Road were the world’s top three most expensive shopping streets, commanding the highest rentals.
Published on an annual basis, the 2012 global survey tracked annual retail rents of the world’s prime retail corridors – from the first quarter of 2011 to the first quarter of 2012 – across 129 cities in North America, Europe, Middle East and Africa (EMEA), Asia Pacific and Latin America.
The improvement in ranking came despite prime rents in Orchard Road easing by 0.5 per cent on-year to S$459.60 per sq ft per year as of the first quarter of 2012.
On a quarter-on-quarter basis, prime rents of retail space remained unchanged in the first quarter of 2012 at S$38.30 per sq ft per month, but eased towards the second quarter by 1.9 per cent to S$37.58.
Colliers International attributed Singapore’s global rank ascent to the strengthening of the Singapore currency against the US dollar.
Charles Ng, director of Retail Services of Colliers International, added: “Additionally, tenants are observed to be more selective in the space they take up – taking into consideration the volume of pedestrian flow and position of shops in malls.
“Landlords are looking to create and maintain the retail identity and concept of their malls by stringently controlling the tenant mix. Consequently, the market experienced inertia on further rent increases.”
With growing competition for tenants and a challenging operating environment, the sector is likely to see flattening growth rental rates for the rest of the year.
But with sustained retail sales growth and more new retail brands entering Singapore, Colliers pointed out that any downward rental movement will be marginal at 3 to 5 per cent for the whole of 2012.
Source : Channel NewsAsia – 11 Jul 2012