Retail space supply to drop sharply after 2019

The total amount of future private retail supply from 2020-2022 is estimated at 0.39 million sqft.

The supply of retail space is set to drop sharply after 2019 in a development that will lend support to occupancy rates, according to a report from CBRE. There is 1.58 million sqft of supply pipeline in 2019 amidst the completion of massive projects like Funan, Paya Lebar Quarter Mall, Tekka Place and AEI TripleOne Somerset Podium. 

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However, CBRE notes that the total amount of future private retail supply from 2020 to 2022 is estimated to fall to only 0.39 million sqft. This works out to an annual average of approximately 0.13 million sqft, significantly lower than the 5-year historical average (2014-2018) of 1.55 million sqft.

The supply in 2019 is 90.4% more than the annual net supply of 1m sqft that launched in 2018, Savills said in an earlier report, adding that the main supply of retail projects in Singapore will come from auxiliary retail components in residential developments by 2020.

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"With the reduced supply pipeline, the market is likely to undergo a period of tightening vacancy over the medium term," CBRE said in the report. 

"The robust supply pipeline in 2019 is not a major cause of concern as most of the upcoming retail space in 2019 has already been absorbed. Demand for prime retail space continues to remain healthy as key projects looking to complete this year have attained stellar pre-commitment rates," it added.

Upcoming retail developments include Northshore Plaza I which will be completed in 2020; Le Quest at Bukit Batok Street 41 which will come online by 2021; The Woodleigh Mall at Bidadari Park Drive which is expected to be completed by 2022; and the 146,000 sqft Punggol Digital District which is set to come onstream by 2023, according to Savills.