2022-10-21-莱坊-Singapore_Retail_Market_Update_Q3_2022_2页_629kb

Singapore Retail Market Q3 2022 Summary

Core Content

The Singapore retail market experienced a general uplift in Q3 2022, driven by the easing of mobility restrictions and a significant increase in tourist inflow. This resurgence was reflected in the growth of retail rents and sales, indicating a recovery from the pandemic's impact.

Main Points

Retail Rents

• Prime retail rents continued to rise across all regions in Singapore.
• Island-wide average gross rental increased by 1.5% quarter-over-quarter (q-o-q) to S$25.60 per square foot per month (psf pm).
• Orchard saw the highest average gross rent at S$28.50 psf pm, with a 1.6% q-o-q increase.
• Suburban areas showed the strongest year-over-year (y-o-y) growth, with an increase of 0.7% to S$25.80 psf pm.
• City fringe and Marina Centre, City Hall, Bugis also recorded modest increases in rents.

Retail Sales Performance

• Retail sales rose by 17.5% to S$6.8 billion in July and August 2022 compared to the same period in 2021.
• Monthly retail sales since November 2021 have exceeded the pre-pandemic average of S$3.2 billion.
• The Retail Sales Index (RSI) (excluding motor vehicles) showed uninterrupted y-o-y growth for six months, reaching 101.8 in August 2022, a 13.0% increase from 90.1 in August 2021.
• Key industries contributing to this growth include Wearing Apparel & Footwear, Food & Alcohol, and Department Stores, each reporting at least 35.0% y-o-y growth.

Market Trends

• Leisure and entertainment activities resumed after a two-year hiatus, boosting retail activity in tourist hotspots.
• F1 race in September 2022, along with MICE events, attracted large crowds and stimulated spending in entertainment, lifestyle, and F&B sectors.
• Themed lifestyle stores are gaining prominence over traditional department stores, with brands like Daiso, Don Don Donki, Decathlon, and Muji establishing themselves in malls.
• Experiential retail is becoming more important, as physical stores need to offer unique in-person experiences to compete with online platforms.

Key Information

• The return of tourists and resumption of events played a critical role in revitalizing the retail sector.
• Prime retail spaces are defined as rental-yielding units between 350 sf and 1,500 sf with the best frontage, connectivity, footfall, and accessibility in a mall.
• Inflationary pressures and the potential for new local outbreaks remain risks to the market's stability.
• The market outlook suggests sustainable recovery, with prime retail rents expected to grow by 2% to 4% for the year 2022.
• Retailers are advised to enhance value propositions and user platforms to differentiate themselves in a competitive market.

Upcoming Supply

• The upcoming supply of retail spaces is expected to increase from H2 2022 to 2026, indicating potential for future growth and competition.

Contact Information

For Retail Leasing inquiries, please contact:
Ethan Hsu
Head, Retail
+65 6228 6832
ethan.hsu@sg.knightfrank.com

For further information on the report, please contact:
Leonard Tay
Head, Research
+65 6228 6854
leonard.tay@sg.knightfrank.com

Nor Adila Rahim
Senior Analyst, Research
+65 6228 6856
nor.adila@sg.knightfrank.com

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About Knight Frank Singapore

• Knight Frank LLP is a leading independent global property consultancy with a presence in Singapore through its head office and two subsidiaries: Knight Frank Property Asset Management and KF Property Network.
• The company provides advisory services to individual owners, buyers, major developers, investors, and corporate tenants.

Disclaimer

• This report is for general information only.
• No legal responsibility is accepted for any loss or damage resulting from the contents of this document.
• Reproduction of this report is allowed with proper reference to Knight Frank Research.