Retail sales rose from February to October 2023. The Department of Statistics reports that they rebounded to S$4.1billion in sales in November.

In 2023, the food and drink sector was still the largest driver. New openings in premier malls will comprise 48 per cent. Following fashion, beauty, and wellness, were lifestyle and lifestyle openings.

Singapore’s arrivals of international tourists in November fell to 1.1 Million, a fourth consecutive decline, but higher than November 2022 when 816.340 arrived. In November of 2019, there were 1,5 million tourist arrivals.

Renter sales have increased in Tier 1 malls beyond pre-Covid numbers due to recovering tourism and revenge shopping. In order to meet rising property operating costs, the landlords have increased their rental expectations.

It is not uncommon for strata malls to be a mishmash, due to the fact that some owners operate their retail or F&B business while others lease out their unit based only on rents without taking into account concept type and trade synergies.

These malls, in a post-pandemic scenario, would benefit by re-designing their positioning and trading mix to create a holistic shopper’s experience that appeals to a whole new generation of shoppers.

Orchard Road’s average rents will rise between 3 and 5% per annum in 2024.

Average rents for suburbs should remain flat in 2014, as inflation and travel abroad will dampen spending on discretionary items in the heartlands.

Pasir Ris Mall, estimated to finish in 2024 with 280,000 square feet of NLA and , has been a major retail development. Labrador Tower has a small retail component that is estimated to be about 30,000 sq.ft. NLA.

Analysts believe the upward trend in Orchard Road rents will continue as tourists spend more, but there is still a downside risk.

In 2024, a full recovery in tourism is anticipated. But, the high cost of accommodation and transport could be pushed up by rising inflation and oil prices.

The weak macroeconomic conditions may cause travellers to be more cautious about their spending and travel arrangements.

Singaporeans will continue to flock abroad, but their purchasing power will be restricted.

Inflation, and to some degree the GST increase have taken the wind from the retail markets sails.

Analysts are of the opinion that long-term, plans to revitalize Orchard Road will lead to a rise in rents.

Orchard Road’s assets are becoming more popular. Tanglin Shopping Centre, which was sold at S$868million in 2022 and Far East Shopping Centre, is being traded for S$908million. Scotts Square also has been put on the market for S$450 million.

The redevelopment or older buildings on Orchard Road may bring in new retail space to attract new tenants. Rents could be raised, as well as the areas being transformed into vibrant and prominent places with more foot traffic.

URA figures estimate that in 2024 there will be an additional 570,000 sq. ft. of retail area.

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This is higher that the 443 733 sq ft NLA for retail space completed 2022. It is similar to the 599 549 sq ft NLA complete in 2021. However, it is lower than 2019’s 1.2 M sq ft NLA.

This year, the retail rental market will be unaffected by any oversupply.

Rents are expected to rise next year as the retail supply in 2024 will still be below the five-year average of 0,62 million sq. ft.

She said that price trends will be positive for both capital values and prices in 2024.

URA statistics show that since the bottom of Q1 in retail space prices in Central Region, they have recovered 0.9 percent. In Q3, price indexes were 26% lower than the Q4 2014 peak.

Singapore retail rents are expected to rebound from pandemic-lows in 2023 due to the return of tourists, and domestic consumer spending.

Market watchers say that, although inflationary and Goods and Services Tax increases may have short-term effects, they are unlikely impact retail spending and to push rents lower.

Prime retail rents in Singapore are expected to grow between 1.5-4.1 per cent over the course of 2023. This increase is largely due to the performance of Orchard Road’s and Downtown’s submarkets.

Retail rents are on the rise due to both a demand-driven increase, primarily for Tier-1 Malls such as Ion Orchard & Nex, but also a cost-driven increase, due to increased inflation.