Magazines Archives - 2010 Oct
Singapores retail rentals stabilising
Story 8 - Property Update
AFTER seven quarters of contraction, retail rents in Singapores prime Orchard Road shopping belt have stabilised, according to global commercial real estate services firm CB Richard Ellis (CBRE).
Rental rates for Q3 this year averaged S$31.10 (US$23.44) per sqf while rents of suburban malls continued to strengthen, underpinned by strong catchment demand. Prime suburban rents rose to S$29 per sqf/month in Q3 this year, up from S$28.50 per sqf/month a quarter ago, said CBRE.
Overall, retail rents headed south in Q3 this year, with the exception of rents in prime Orchard Road and suburban malls. The difference in rentals between prime suburban and prime Orchard Road space continued to narrow.
In 1996, the gap between the two markets was 28.8%, the difference shrinking to 13.2% by end-2009. In Q1 and Q2 this year, the gap decreased further by 12.6% and 8.2% respectively. It was only a mere 6.6% difference in Q3 this year.
Said Letty Lee, director of Retail Services at CBRE Singapore: This trend is likely to continue as Orchard Road adjusts to the recent new supply as well as competition from the Integrated Resorts. We need to bear in mind that suburban malls have mass-market appeal as they are strategically located with good transport connections, residential catchment in its immediate surroundings and as such are an attractive alternative to a large number of tenants.
According to CBRE, about 4.12 million sqf of retail space is likely to be completed between Q4 this year and 2015. Of this, just under two million sqf will be completed in the next 15 months. These include Phase 1 of Marina Bay Link Mall with 93,800 sqf net lettable area (NLA), Clementi Mall (194,000 sqf NLA), Orchard Xchange at Orchard MRT (16,800 sqf NLA), nex at Serangoon Central (600,000 sqf NLA) and Solaris at one-north (3,200 sqf NLA). ra
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