Prime retail rents pick up in Q4, says DTZ Research

Prime retail rents have picked up in the current fourth quarter as leasing activity gather steam on the back of improved confidence and economic recovery, according to DTZ Research.

Its estimates showed that gross rents of prime first-storey retail space in Orchard and Scotts Road increased marginally by one per cent to S$39.10 per square foot per month, after falling 7.3 per cent in the last four quarters.

However, in other city areas, gross rents of first-storey retail space fell by 1.2 per cent to S$24.40 per square foot a month, reflecting a total fall of 10 per cent from the peak in the third quarter of 2008.

Similar rents in suburban malls fared better, with DTZ saying they rose 1.5 per cent on quarter to S$33.50 per square foot per month.

For 2010, DTZ expects prime retail rents in Orchard/Scotts Road and the suburban areas to increase by between two and seven per cent.

This year, it said over 1.3 million square feet of new retail space was added along Orchard Road with the opening of ION Orchard, Orchard Central, 313@Somerset and Mandarin Gallery.

However, the firm projects a dip in supply of retail space next year to 165,000 square feet, which is about seven per cent of some 2.4 million square feet of new retail space estimated to be available in 2010.

Outside of the city, it said most of the new supply will be concentrated in Resorts World Sentosa and Nex mall at Serangoon Central, posing limited pressure on other suburban malls.

Source : Channel NewsAsia – 21 Dec 2009

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