Singapore Property News

As a result, the gap now stands at exactly $1 per square foot (psf) per month.

 

Figures from CB Richard Ellis (CBRE) show that the average monthly prime suburban rent remained at $29.10 psf in Q1 while that for prime Orchard Road shop space eased 10 cents to $30.10 psf in Q1.

 

'It is likely that prime retail rents along Orchard Road would continue to soften in the near to medium term as recent completions along Orchard Road have not been digested and rental re-negotiations at some of these malls are imminent.

 

'Prime suburban rents are likely to stabilise, primarily because such malls are defensive assets retailing goods and services for which consumption is relatively inelastic,' said CBRE's director of retail services Letty Lee.

 

CBRE also pointed to mixed signals in the retail leasing market in Q1, alluding to the exit of fashion and accessories store ALT from The Heeren Shops while Knightsbridge announced that it is fully let after securing American casual wear brand Abercrombie & Fitch for a 21,000 sq ft multi-level space.

 

Knight Frank managing director Danny Yeo highlighted that while food and beverage outlets are doing well generally across Singapore's malls reflecting a changing lifestyle, it is a somewhat different picture for some fashion outlets.

 

'Some mid and upper-priced clothing brands have opened multiple stores along Orchard Road and this has led to some cannibalisation. On the other hand, these brands are unwilling to set up shop in suburban malls – except for a few strategically located shopping centres – as they still feel their shoppers would be more inclined to buy their fashion apparel in the Orchard Road area.

 

'It remains to be seen whether these brands will be willing to go into the new suburban malls that will open in about three years on sites sold at Government Land Sale tenders such as in Jurong East, Bedok and Punggol Central/Walk.'

 

CBRE's analysis showed that the number of caveats lodged for the purchase of retail space fell from 156 in Q4 last year to 80 in Q1 2011 (up to the first week of March), although more caveats for the first quarter would be lodged in coming weeks.

 

Nonetheless, the tally so far for Q1 has surpassed the 75 for Q1 last year.