Retail rents in central region to slump 8% later this year

Landlords and retailers are off to another bumpy ride. The retail outlook for this year seemed to still be on the cloudy side for both retailers and landlords.

According to Knight Frank’s latest Singapore Retail Bulletin, average rents in the Central Region are envisaged to fall by 5.0% to 8.0% by Q4 2017, while the more resilient prime rents to moderate downwards by up to 3.0% YoY in the same period.

“Landlords are likely to take on a more proactive role to initiate more advertisement and promotion activities in a bid to attract shoppers into the mall. On the same note, retailers are also expected to explore innovative concepts that integrate both offline and online retailing platforms to enhance consumer engagement,” the research house said.

Meanwhile, the occupancy performance is expected to hover between 90% and 92% this year, after maintaining an average of 92.2% over the first three-quarters in 2016. This is in consideration of the close to 2m sq ft. gross floor area of retail space slated for completion in 2017 amidst the heightened level of caution among retailers towards their business strategies due to the uncertain global economic outlook.