Retail runs at two speeds as suburban outperforms central

Islandwide retail vacancy rose to 7.1% in Q2.

Singapore’s retail market is moving at two speeds, with central malls experiencing weaker demand while suburban malls hold steady.

Savills reported that islandwide retail vacancy grew by 0.3 percentage points (ppts) quarter-on-quarter to 7.1% in Q2 2025, due to softer demand in the Central Region.

Vacancy in the Central Region rose to 8.2%, an increase of 0.6 ppts from Q1.

Both the Downtown Core and the Rest of Central Area registered net reductions of approximately 75,000 sq ft in occupied space.

On the other hand, the Suburban Area’s vacancy rate has stayed steady at 5.2%.

Alan Cheong, executive director of Research & Consultancy at Savills Singapore, said suburban malls have maintained steady vacancy rates thanks to their “strong connectivity and large local catchments.” 

Cheong expects the gap in performance between prime, well-located assets and weaker malls to widen.

Cheong said the limited supply pipeline over the next two years should provide some support for occupancy and rents.

Owners of weaker-performing assets, however, may still need to offer flexible lease terms or rental incentives to fill less prime spaces, according to Savills.

Savills estimates that 2025 completions will total about 570,000 sq ft of net lettable area (NLA), down from 679,000 sq ft in 2024. 

Annual supply will likely fall below 380,000 sq ft in 2026 and 2027, before rebounding with larger projects, such as the Marina Bay Sands expansion, towards 2028–2029.