Retail rents fall 4.5% in 3Q; prices rise 2.2%: URA
By Charlene Chin
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - Retail rents fell by 4.5% q-o-q in 3Q2020, while prices of retail properties rose 2.2% q-o-q, based on statistics released by URA on Oct 23.
(Source: URA)
The fall in rents over 3Q2020 marks the third consecutive quarter of decline, following the fall of 3.5% in 2Q2020, and is a historical low, say consultants. Since the start of 2020, rents in the Central Region have already fallen by 10%, notes Desmond Sim, head of research for Southeast Asia at CBRE.
“The retail market remains two-tier, with the drop largely contributed by poorer performances in secondary spaces and corridors. In addition, rentals for malls in the City Hall/Marina Centre, Orchard and Downtown Core locations are likely to be more affected, owing to lower footfall in the absence of tourists and office workers,” says CBRE Research.
(Source: URA)
Closures in 3Q2020 included international fashion retail brands Top Shop and Topman in ION Orchard and VivoCity, and H&M in Tampines Mall. Department stores Tokyu Hands and Robinsons also shuttered their stores in Westgate and Jem, respectively. New openings, mostly deals concluded prior to Covid-19, continued to lag behind attrition, resulting in a third consecutive quarter of contraction in the overall net absorption of retail space, and dragging down rents, notes Tay Huey Ying, head of research & consultancy at JLL Singapore.
(Source: URA)
Meanwhile, the occupancy rate fell by 50,000 sq m (538,200 sq ft) in 3Q2020, an improvement over a decline of 93,000 sq m in 2Q2020.
(Source: URA)
Although net absorption in the market remains negative, new openings from retailers in the athleisure and F&B sector have helped to negate the extent of the negative net absorption from closures and consolidations in the retail sector, says CBRE’s Sim.
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