Orchard Road landlords reeling as key retailers exit
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More shops are moving to the suburbs.
More retailers are opting to vacate their prime spaces in Orchard Road and move to the heartlands instead, according to a report by CBRE.
This trend exacerbates the problems ailing Singapore’s retail leasing scene, which has been hard-hit by a decline in both tourist and local spending.
“As part of cost saving measures, more established retailers have opted to relocate out of prime corridors to secondary corridors, especially in the Orchard Road sub-market,” CBRE said in a report.
Although exits have weighed on rents, CBRE noted that freeing up prime space has allowed landlords to pursue retailers seeking flagship space.
“Demand is likely to stay patchy with retailers expected to be even more discerning about store location and openings as their operations evolve to include more retail channels. This does not bode well for overall occupancy with more supply dude to complete from now till 2019,” CBRE said.
Questions & Answers
Q.Which specific areas are retailers moving to instead of Orchard Road?
Which specific areas are retailers moving to instead of Orchard Road?
Retailers are opting to vacate their prime spaces in Orchard Road and relocate to the heartlands, according to the report. This move is generally part of cost-saving measures for established retailers.
Q.What is causing the decline in Singapore’s retail leasing scene?
What is causing the decline in Singapore’s retail leasing scene?
The retail leasing scene in Singapore has been hard-hit by a decline in both tourist and local spending. The trend of retailers moving out of prime areas like Orchard Road is exacerbating these existing problems.
Q.How do landlords benefit from retailers leaving prime Orchard Road spaces?
How do landlords benefit from retailers leaving prime Orchard Road spaces?
Freeing up prime space has allowed landlords to pursue other retailers who are specifically seeking flagship store locations. However, demand for these spaces is expected to remain inconsistent.
Q.What is the outlook for overall occupancy in Orchard Road over the next few years?
What is the outlook for overall occupancy in Orchard Road over the next few years?
The outlook for overall occupancy does not look positive, as more retail supply is due to be completed between now and 2019. Retailers are also expected to be more selective about new store locations.
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