Prime rental rates remain unchanged in Q3

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

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