Retail property market to see broad-based recovery after Q2

For the entire year, prime retail rents is expected to grow by 2% to 4%.

The worst will be over for the retail property market after Q2, according to Knight Frank, adding that retail rentals have already bottomed out. 

In a report, Knight Frank said the removal of restrictions and implementation of the VaccinatedTravel Framework (VTF) gave a boost to prime retail rents in shopping and business districts in Singapore.

In Orchard Road, the prime retail rents increased 0.5% to S$28.00 psf pm.

Rentals of prime retail space within the central areas of Singapore also inched up 0.6% q-o-q to S$23.10 psf pm.

"The pick-up in tourists’ inflow contributed to the rise in footfall in Q2 2022, injecting life into the shopping district which was deprived of pedestrian traffic during the pandemic years," Knight Frank said.

"Similarly, within the Central Business District, queues have reappeared with lunchtime crowds filling up eateries," the expert added.

With improved retail rentals, the island-wide average gross rental for Q2 expanded by 0.4% QoQ to S$25.20 psf pm.

For the entire year, Knight Frank experts prime retail rentals to post a 2% to 4% growth.

Supporting the retail market's board-based recovery will be supported by improvements in Singapore's tourism.

"With tourism being a priority focus for the city-state, and its move towards sustainability complementing its City in Nature identity, retailers are likely to benefit in the near future," Knight Franks said.

To help position itself as an "urban wellness haven," Singapore has launched a 10-day Wellness Festival at Gardens by the Bay and the National Art Gallery of Singapore that will feature multi-sensory pop-up spaces and masterclasses focused on wellness and mindfulness.