2023-01-16-莱坊-Singapore_Retail_Market_Update_Q4_2022_2页_587kb

Singapore Retail Sector Summary - Q4 2022

Core Content

The Singapore retail sector showed signs of recovery in Q4 2022, despite the ongoing global economic challenges. The return of consumer activity, particularly in the prime retail areas, marked a positive shift as the city-state moved towards a post-pandemic normal. This recovery was driven by increased footfall, public events, and the resumption of international travel, which helped to boost sales and confidence in the market.

Main Points of Recovery

• Prime Retail Rents Recovery:
  Prime retail rents across Singapore saw a steady recovery, with an average of S$26.10 psf pm in Q4 2022, representing a 1.7% quarter-on-quarter (q-o-q) increase and a 2.6% year-on-year (y-o-y) growth for the year.

  • Orchard Road led the recovery, with prime rents rising to S$29.10 psf pm, a 3.1% y-o-y increase and a 2.2% q-o-q rise.
  • Marina Centre, City Hall, and Bugis also showed strong growth, with rents at S$23.90 psf pm, a 2.6% y-o-y increase.
  • City Fringe and Suburban areas recorded lower but still positive increases of 1.5% and 1.9% q-o-q respectively, with Suburban rents at S$26.00 psf pm and City Fringe at S$22.30 psf pm.

• Retail Sales Performance:
  The retail market, excluding motor vehicles, contributed S$3.6 billion in sales in October 2022.

  • In November, the sector recorded another S$3.6 billion in sales, with online sales increasing by 2.0 percentage points month-on-month to 16.5% of total retail sales.
  • The Retail Sales Index (RSI) rose by 12.0% in October and 5.9% y-o-y in November.
  • Key segments contributing to the growth were Food & Alcohol, Wearing Apparel & Footwear, and Department Stores.

Local Brands Going Global

• Several Singapore-based brands, such as Charles & Keith, Love, Bonito, Castlery, and Paradise Group, experienced significant growth during the pandemic and have since expanded their presence internationally.
• The global appeal of made-in-Singapore brands is increasing, supported by government initiatives aimed at promoting local businesses.
• Retailers and landlords are encouraged to support these local brands by offering prime retail space, which can further enhance their international recognition.

Market Outlook

• The retail sector in Singapore is expected to continue its recovery in 2023, with prime rents likely to increase between 3% and 5%.
• The Orchard Road shopping belt is anticipated to lead this growth due to its strong connectivity and appeal to international visitors.
• The sector is becoming more digitally mature, with retailers and landlords leveraging omnichannel commerce and digitalisation to enhance their offerings.
• The next stage of retail evolution could involve personalisation and bespoke services, especially for premium shoppers, with a focus on tailored experiences across fashion, entertainment, and dining.

Upcoming Supply

• There is an expected increase in retail supply from Q4 2022 to 2026, which could influence market dynamics and rental trends in the coming years.

Contact Information

• For Retail Leasing Enquiries:
  Ethan Hsu
  Head, Retail
  +65 6228 6832
  ethan.hsu@sg.knightfrank.com

• For Further Information on the Report:
  Leonard Tay
  Head, Research
  +65 6228 6854
  leonard.tay@sg.knightfrank.com

About Knight Frank Singapore

Knight Frank is a leading global property consultancy with over 16,000 professionals across 384 offices in 51 territories. It provides services to individual clients, major developers, investors, and corporate tenants. In Singapore, Knight Frank operates through its head office and two subsidiaries: Knight Frank Property Asset Management and KF Property Network.

Disclaimer

This report is for general information only. Knight Frank does not accept legal responsibility for any loss or damage resulting from the use of this document. Reproduction is allowed with proper attribution to Knight Frank Research.