Rentals of prime spaces in suburban malls were most resilient throughout 2021 with road to recovery

Retail rents at prime across Singapore dropped 1.1% q-o-q in 4Q2021 with an average of $25.40 per month. according to research conducted from Knight Frank.

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Through 2021, prime retail rental dropped 5.8% y-o-y. Ethan Hsu, head of retail at Knight Frank Singapore, notes that the rents of high-end malls in suburban areas have been the most resilient through 2021, despite the decline by 3.5% y-o-y was recorded.

“Prevailing policies for work-from-home, especially when workers were forced to abide by strict workplace policies, helped the retail industry in the heartland areas of residential communities,” he explains. For comparison the rents for prime retail in Orchard declined 6.9% y-o-y in 2021 as rental rates in Marina Centre, City Hall and Bugis areas dropped 6.6% y-o-y.

However, Hsu is sanguine on the prospects for retail rents at the top of the range this year, when employees return to work with a capacity that is increased by 50% beginning in January. “Footfall throughout the CBD zone and also the main Orchard Road shopping belt increased toward the end of 2021. This will give more retailers the confidence to expand and expand by 2022.” Hsu says.

The reasons for this are the effects of pandemics that continue to help local retailers, for example, the absence of foreign brands, increased support locally-owned brands the availability of affordable retail space and a steady local supply chain.

Additionally, he explains Singapore’s monthly retail sales index continued to be rising during 4Q2021, gaining 10.9% and 3.9% over the course of October and November respectively.

As Singapore continues to transition to living under COvid-19 Hsu is of the opinion that rents at prime stores in malls located in the suburbs are already beginning to show signs being at their lowest. He anticipates that retail stores located in Orchard along with CBD CBD following suit, as the amount of travel across borders grows over 2022.

“There is a good chance that island-wide retail rents are expected to improve during the process of recovery and will increase between 2% to 4% throughout this year” He says.