Rentals for Singapore retail properties set to rise by 5%-9%: Knight Frank

Rentals for retail properties in Singapore are poised to increase by between 5 and 9 percent this year.

A report by property consultant Knight Frank says supply of new retail space in the prime shopping areas remains scarce despite the opening of mega malls such as VivoCity at the HarbourFront area.

For the third quarter, Knight Frank says shop space rental in the Marina Centre area moved up 2.5 percent quarter on quarter to S$27.80 per square foot per month. The Orchard Road area remained a magnet for shoppers and retailers, with prime retail space rentals there rising 1.8 percent to reach S$38.80.

But so-called fringe areas did even better.

Rentals increased about 5.9 percent to S$21.90 per square foot, due to new malls such as VivoCity at the HarbourFront area and the completed extension of Velocity @ Novena Square.

The extension to Velocity @ Novena is due to be opened in the fourth quarter before Christmas, along with the Square 2 mall next to Novena Square and the Centrepoint extension.

Knight Frank expects overall capital values of retail space to rise by between 4 and 8 percent year on year.

And it says there is an emerging trend towards smaller shop units which could boost rental yields.

Shopping malls such as Square 2, Suntec City and Icon Village at Tanjong Pagar are leasing out new shop units with lettable areas of about 100 square feet.

This compares with typical unit sizes of between 300 and 400 square feet a few years ago.

Source: Channel NewsAsia, 09 October 2006

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