SINGAPORE (EDGEPROP) - Overall retail rents in Singapore improved by 0.4% q-o-q to reach $25.20 psf per month (pm) in the second quarter, while prime retail rents in Orchard Road increased by 0.5% q-o-q to $28 psf pm. Similarly, prime retail rents in the central areas increased by 0.6% q-o-q to $23.10 psf pm, according to Ethan Hsu, the head of retail at Knight Frank.
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The resumption of dining-in brought the total physical retail sales in May to $3 billion, the highest monthly sales since the festive season in December last year, he explains.
Online sales moderated as consumers reverted to physical shopping and dining, making up 13.6% of the total in May, down 0.5% from the previous month. However, currently online retail still makes up a higher proportion than in the pre-pandemic days when it hovered below the 10% mark. Hsu anticipates the percentage of online retail sales to stabilise within the new normalised range, given the benefits of digital platforms.
“In addition, the Vaccinated Travel Framework (VTF) and the removal of restrictions have been a long-awaited boon for retailers,” Hsu says. Tourism arrivals in April and May more than doubled as compared to the first three months of the year, totalling 0.7 million.
On April 6, Minister of State for Trade and Industry Alvin Tan announced that nearly $500 million will be allocated to support the recovery of Singapore’s tourism sector by injecting grants and initiatives to attract travellers through fresh and innovative experiences. New concepts such as the sports facility, Trifecta, will be built along Orchard Road. Spanning a total of 49,000 sq ft, it will offer activities such as skiing, snowboarding and surfing, and is scheduled to be ready by 2023.
Hsu anticipates a broad-based recovery in the retail sector as the shift towards tourism becomes a priority. Despite the uncertainty of a potential recession, Singapore remains a key destination for tourism and Mice events such as the Singapore Grand Prix in September.
As Singapore transitions to normalcy, Hsu projects prime retail rents to grow by 2% to 4% for the whole of 2022.