2022-07-20-莱坊-Singapore_Retail_Market_Update_Q2_2022_2页_577kb

Singapore's retail market showed a strong rebound in the second quarter of 2022, driven by the easing of community Safe Management Measures and increasing tourist arrivals. Monthly retail sales reached S$3.0 billion in May 2022, the highest monthly total since December 2021, supported by a rise in footfall as dine-in activities resumed without capacity limits. Despite a moderation in online sales (now at 14.1-14.6% of total retail sales), online share remains higher than pre-COVID levels at less than 10%, reflecting the shift to e-commerce that offers broader marketing reach.

Prime retail rents bottomed out and began recovering, with Orchard Road rentals increasing 0.5% to S$28.00 per square foot per month, while island-wide average gross rentals rose 0.4% to S$25.20 psf pm. Tourism played a key role, with the Vaccinated Travel Framework (VTF) reducing quarantine requirements, leading to a surge in visitor arrivals—713,405 in April-May 2022, more than double the first-quarter figures. This influx revitalized central retail areas, supported by government initiatives like S$500 million in tourism grants and new attractions such as the Trifecta sports facility.

Looking ahead, a broad-based recovery is expected for the rest of 2022, with retail sales projected to grow due to transitioning to normalcy and events like the Singapore Grand Prix. Prime rents could increase by 2-4% overall this year. However, landlords and retailers must innovate and integrate alternative trading platforms to adapt to the new normal, where both online and offline strategies are crucial despite consumers returning to physical stores.

This rebound is part of Singapore's broader focus on sustainability and wellness, with events like the Wellness Festival helping position the city as an urban wellness destination. Knight Frank Research highlights that while uncertainties like potential recessions exist, Singapore's retail sector remains a key growth area.