SINGAPORE (EDGEPROP) - Prime retail rents in Orchard Road fell 1.4% to $35.27 psf per month (psf/mo) in 1Q2020, and is expected to decline by 10% in 2020.
Meanwhile, retail rents for malls in Other City Areas — URA Central Areas excluding Orchard — fell by 0.6% to $21.63 psf/mo in the first three months of the year, says Cushman & Wakefield (C&W) in a report.
The outlook is slightly different for suburban malls, with rents rising slightly by 0.3% to $31.85 psf/mo. Such malls are generally more resilient due to their dominance in the heartlands, and upcoming supply in these locations is fairly tight, says C&W.
During the Global Financial Crisis, the Orchard prime rents dropped by 15% from peak to trough, while suburban prime rents rose by 1% during the same period.
Overall, C&W forecasts that retail sales in 2020 could potentially fall by about 7%, as tourist and domestic spending takes a plunge. In Singapore, tourist spending accounts for about one-fifth of the total retail sales.
The 28-day “circuit breaker” measures starting on April 7 could further exacerbate retail’s woes as footfall to malls is greatly reduced, it adds. This includes malls in Marina Centre, Newton, and Harbourfront, which caters also to workforce crowds.
Retail leasing activity during the quarter include Don Don Donki’s 26,000 sq ft expansion at JEM, Shake Shack’s expansion at 89 Neil Road, and Grab Kitchen’s new 6,000 sq ft space at 63 Hillview Avenue.
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