RETAIL rents in the prime Orchard and Scotts roads belt, other city areas and the suburbs were all unchanged in the first quarter of this year, according to DTZ Research.
They are still down as much as 10 per cent in some areas from their Q3 2008 peaks, but have now stabilised across the island, DTZ’s data show.
In Q1, the gross rent for prime first and upper-storey retail space in the Orchard and Scotts belt remained at $39.70 per sq ft per month (psf pm) and $20.50 psf pm respectively.
DTZ says the market managed to absorb new supply – from the opening of Ion Orchard and 313@somerset – that came on stream in 2009 and in Q1 this year.
First-storey rents in the Orchard and Scotts belt are down about 6 per cent from the peak at Q3 2008.
Rents in ‘other city areas’ took an even bigger hit during the economic slowdown, falling about 10 per cent from Q3 2008.
But the slide has stopped after five consecutive quarters of decline. Prime first and upper-storey retail space in these areas remained at $24.40 and $14.00 psf pm in Q1 2010.
Rents in suburban areas, which fell only marginally during the downturn, also held firm during Q1 – at $33.50 and $22.80 for first and upper-storey space respectively.
According to Chua Chor Hoon, head of DTZ’s South-east Asia research team, the retail industry has been boosted by more tourist arrivals and rising consumer confidence this quarter.
‘As tourist arrivals are expected to grow and local consumption improves, demand for retail space is likely to increase,’ Ms Chua says. ‘On the back of a brighter outlook for the retail industry, prime retail rents are expected to rise moderately.’
DTZ expects some 2.3 million sq ft of new retail space to be added this year, 15 per cent lower than the 2.7 million sq ft added in 2009.
Source: Business Times, 23 Mar 2010