Shopping mall rents in Singapore are likely to stay flat for a second year in a row, held down by strong resistance on the part of retailers already struggling with high costs, property services firm Colliers International said on Tuesday (Jan 6).
Colliers estimated that for the whole of 2014, the average monthly gross rents of prime retail space in Orchard Road slipped by 0.8 per cent year-on-year, while rents in regional centres edged up by 1.1 per cent year-on-year.
Looking ahead, Colliers said it expects rents for prime ground-floor retail space in the Orchard Road district to range between a drop of 1 per cent and a rise of 1 per cent for 2015. As for regional centres, rents could plateau at between 0 per cent and 2 per cent.
“Retail rents are expected to continue to be at a standstill for 2015, as the positive interest from retailers to set up shop or expand will still be matched by retailers’ resistance to any increases in their operation cost in a challenging operating environment,” Colliers’ Director of Research & Advisory Chia Siew Chuin said in a statement.
Calvin Yeo, the firm’s deputy managing director, added that Singapore’s retail scene has also changed, with more retailers and food and beverage (F&B) operators opting for niche locations such as the shophouse enclaves in Tanjong Pagar, Kampong Glam and Joo Chiat.
Some firms have also chosen to operate from obscurely-located industrial buildings or remote and private sites away from the hustle and bustle of urban life, he added.
“Many of these hidden gems position themselves to provide an uncommon ethnic or relaxed ambience, and are unfazed by the fact that they are not located amid heavy pedestrian traffic.”
Source : Channel NewsAsia – 6 Jan 2015