New fashion and lifestyle brands spur recovery in retail sector

In 3Q2023, a number of new international retailers have made their mark in Singapore, bringing occupancy levels in prime retail spaces in the Central Region up. This is largely attributed to many foreign F&B players making the city-state their entry point for regional expansion, with French patisserie Cedric Grolet opening its first Asian outlet here and Australian beverage brand Chaffic launching at Westgate. It also helped that local lifestyle brands leveraged social media to create viral responses to their promotions, making them attractive to a digitally savvy demographic.

As consumer behaviour shifts, retail rental and occupancy are reflecting the upturn. The URA retail rental index has seen two consecutive quarters of positive growth—0.5% q-o-q in 3Q2023 and 0.3% in 2Q2023—while the overall vacancy rate have dropped to 7.2% in 3Q2023. In the Downtown Core, net demand rose, while the vacancy rate plummeted to 7.9%, the lowest since 4Q2019.

Meanwhile, the Outside Central Region also saw new retailers enter the market, with a slight rise in vacancy rate of 0.2 percentage points q-o-q to 4.2%. Despite the marginal increase, it still remained at the lower end of the 5-year average before the pandemic.

Various factors have contributed to the market’s recovery, from the return of China’s outbound tourism to the pre-commitment of upcoming retail developments. A potential challenge however, comes in the form of higher labour costs and intensified competition for consumers, it’s driving some retailers to consolidation.

Residents at Marina Gardens Condo enjoy easy access to public transportation as well.

The Marina Gardens Condo is the quintessential embodiment of the luxurious and vibrant Marina Bay skyline. Residents at Marina Gardens Residences can also enjoy a wide variety of high-end dining, shopping and entertainment options that the Marina Bay Financial Centre has to offer. Furthermore, public transportation around the area is easily accessible from the condo.

Still, Singapore’s resilient consumption demand makes it attractive to foreign and local retailers alike. With projections of visitor arrivals reaching the range of 12 to 14 million for the entire of 2023, landlords are likely to stay firm with their rental expectations. This, combined with the low availability of prime retail spaces, it’s expected that retail rental recovery in the Central Region should pick up.