Rents of prime retail space at Orchard Road fell 2.1 percent year-on-year, a better than expected performance from the three to five percent decline forecasted at the start of 2013, according to a report from Colliers International.
In the regional centres, rents of prime retail space inched up by 0.1 percent for the entire year.
On a quarterly basis, monthly gross rents of prime ground floor retail space in Orchard Road climbed 0.2 percent to S$36.46 psf in Q4 2013, while those in the regional centres held firm at S$33.46 psf.
“2013 was a year when the retail property sector enjoyed the impetus of new stores set up, as well as expansion into new and existing malls the moment space becomes available,” said Calvin Yeo, Deputy Managing Director of Colliers International.
The report also highlighted a narrowing gap between the rental premium of prime retail space in Orchard Road and those in the regional centres from 31 percent in 2007 to just nine percent as of end-2013.
“The narrowing of (the) rental gap between Orchard Road and the Regional Centres is an indication that retail activities are spreading out from Orchard Road to various locations across the island,” Yeo noted.
“While the malls in Orchard Road still cater to the tourist crowd, and to locals to shop for a unique product or service, or to dine for a special occasion, retailers also see the potential in sub-urban malls in pulling in pedestrian traffic and crowd.”
“As such, we see that some retailers have recently opted to also set up shop in sub-urban malls, such as Kate Spade Saturday and Armani Exchange in Westgate, and Sembonia in Bedok Mall,” he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email firstname.lastname@example.org
Asia to benefit after Fed taper move
Developers making overseas push as cooling measures bite
Perennial acquires Somerset property for $970m