Retailer caution triggers slower rental growth in Q4

Retail sales up 0.8%, rental growth remains moderate.

Singapore’s retail market showed positive but slower growth in the fourth quarter of 2025, supported by a 4.8% real gross domestic product growth rate and a 0.6% inflation rate, according to a Cushman & Wakefield Marketbeat report.

Retail sales also rose 0.8% year to date as of November 2025, driven by computer & telecommunications equipment and recreational goods.

Rental performance remained positive but softened due to caution amongst retailers, according to the report.

Other City Areas and Orchard prime retail rents rose 2.1% and 1.6% year on year (YoY), supported by a limited supply of new retail space, whilst suburban rents edged up 0.9% YoY.

The city-state’s market is poised for moderate growth in 2026, with Orchard and suburban prime retail rents expected to grow 1.5% to 2.5% YoY in 2026, outpacing Other City Areas at 1.0% to 2.0%, the report said.

Annual islandwide new retail completions will also average just 0.3 msf from 2026 to 2029, well below the historical 0.8 msf.

Rents in tier-1 retail malls are projected to increase due to low vacancy rates and steady tenant sales growth.

Retailer occupancy costs have also increased, but remain below pre-pandemic levels, the report said.

The report also highlighted several high-profile openings, including a 47,000-square-foot Shaw Theatres at Jem, the entry of Chick-fil-A at Bugis+, and luxury expansions by Maison Margiela and Chanel in the Orchard district.

Chinese retailers have also penetrated the market with five new KKV outlets and 15 new locations from Chagee.