Shoppers at Orchard Road (Credit: Albert Chua)
SINGAPORE (EDGEPROP) - Singapore's retail real estate market continued to report positive rental growth across all three submarkets in 3Q2022, according to Edmund Tie’s Real Estate Times report for the quarter released on Oct 17.
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“Average monthly retail rents in Orchard/Scotts Road outperformed other submarkets, rising by 3% q-o-q in 3Q2022,” the report says.
“The retail sector continues to shine due to increased footfall from tourists as Singapore is back in action, hosting globally recognised events such as the recent Singapore Grand Prix which saw record-breaking attendance,” says Lam Chern Woon, senior director of research and consulting at Edmund Tie.
Rising international tourism arrivals for the eight consecutive month in September translates to the stronger rental performance in the Orchard/Scotts Road submarket.
Lam expects retail rents to remain favourable in a broad-based recovery in face of rejuvenating older retail assets and the introduction of more experiential retail, such as plans for a sports facility in Orchard Road and rejuvenation of *Scape and CQ @ Clarke Quay.
Meanwhile, total investment sales fell 37% q-o-q in 3Q2022 to $5.51 billion. Residential sales led in the quarter at $3.43 billion, followed by the office sector. Lam expects investment transaction volume to slow as investors adopt a more conservative stance due to economic uncertainties.
Overall CBD office occupancy improved by 1.3 basis points QoQ to 95.1% in 3Q2022. Strong growth in leasing demand is expected, with more offices to feature flexible spaces, sustainable designs and smart technologies. Lam projects Premium and Grade-A office rents to rise by 6% and 9% respectively in 2022.
On the industrial front, in 3Q2022, rental growth was led by warehouse and logistics spaces at 2.6% QoQ, while by 1.7% to 2.2% QoQ for multiple-user factory. Lam expects industrial rents to moderate, with warehouse rental growth projected at 7% to 8% for the year due to protracted supply-chain disruptions.