Potential investors snub Singapore retail assets amid intensifying labor crunch

Retail rents will continue to languish.

Manpower shortage and increasing operation costs are keeping potential investors from snapping up retail assets in the country, as unfavorable local conditions continue to dampen retailers’ growth plans.

A report released today by CBRE revealed that Singapore is trailing behind other countries in the region when it comes to investment demand for retail assets. Australia and Japan recorded strong investment demand from international retailers, while Singapore and Greater China languished in the sidelines.

“The retail sector in Singapore continues to be hampered by the ongoing labour shortage. The Ministry of Manpower recently tightened the ratio of two foreign hires to every three locals, a move that will further inhibit retailer expansion. This, combined with weak consumption, is affecting investment appetite for retail assets.

“Rental growth over the remainder of the year will be led by Japan, Australia, and emerging markets in Southeast Asia. Subdues demand in China, Hong Kong and Singapore will depress rental growth and increase yield decompression pressure,” CBRE noted.

Meanwhile, a report by Savills showed that prime retail rents on Orchard Road continued to stay flat at $34.6 per sq ft per month in the third quarter. Prime suburban rents have also languished at $31.1 per sq ft per month.

“Rents are less likely to increase as slower retail sales and high operation costs cap rental growth,” stated Savills.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia