Chart of the Day: Rental gap between suburbs and central narrows in Q2

From around 11.3% in Q1 2015, the gap has narrowed to roughly 1.9% in Q2 2019.

The rental gap between median rents at prime locations compared to suburban areas has narrowed substantially from around 11.3% in Q1 2015 to 1.9% in Q2 2019 in a reflection of the resilient and growing demand in the densely populated submarket, according DBS.

"Despite higher supply, retail rents in suburban areas are growing fast," analyst Alfie Yeo said in a report. "It is no surprise that submarkets with lower per capita mall floorspace have delivered some of the best reversions YTD, as implied by median rent growth over 2016 to June 2019."

Also read: Retail space supply to drop sharply after 2019

Of the total supply of retail space in the pipeline in Singapore (in terms of GFA) which stands at 320,000 sqm as of Q2, around 44% is projected to be from the suburbs. This includes LendLease’s PLQ Mall in the Central East region, which makes up around 30%.

Suburban retail supply across private and public sectors have grown at a CAGR of 1.4% over the last two decades, outperforming all regions but Orchard where supply has grown by 1.6% CAGR.

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