RENTALS in the prime Orchard area continued to slide lower from last quarter, in contrast to prime suburban areas which have seen rentals starting to edge higher.
A study by property consultancy firm CB Richard Ellis released yesterday said prime Orchard Road rents declined 3 per cent quarter-on-quarter to average $32.90 per square foot (psf).
For the full year, Orchard Road rentals are expected to fall between 10 and 12 per cent and will continue to decline next year, but at not more than 5 per cent, the report said.
Still, CBRE said rentals are not expected to fall below $30 psf each month, a trough last seen between 1998 and mid-2000 amid the Asian financial crisis.
In contrast to Orchard Road, prime suburban rentals inched up 0.7 per cent quarter-on-quarter to average $28.50 psf in Q3 this year, noted CBRE.
Meanwhile, pre-committed tenancies at new shopping centres on Orchard Road have remained at healthy levels.
The CBRE report said that Mandarin Gallery on Orchard Road is almost 100-per-cent occupied ahead of its pre-Christmas opening. At luxury mall Knightsbridge, situated at the new Grand Park Orchard hotel, pre-committed leases have hit the 50-per-cent mark. The remaining leases are expected to be finalised in this third quarter. The mall is expected to open in the first half of next year.
TripleOne Somerset beside the Orchard Youth Park is 60-per-cent pre-let, while 313@Somerset across the road is 90 per cent taken up ahead of late-November opening.
"With some 1.21 million sq ft of retail space due for completion within the Orchard Road shopping belt in 2009 to 2010, retailers were spoilt for choice after a long drought," said CBRE.
Source: Today, 15 Sep 2009
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