SINGAPORE - Singapore's prime retail rents continue to weaken in the second quarter of this year, according to commercial real estate services firm CBRE.
Average prime retail rents in Orchard Road as tracked by CBRE Research declined 1.1 per cent from the previous quarter to S$32.50 per square foor per month currently. This marks the sixth consecutive quarter of decline for rents there, said CBRE. On a year on year basis, rents in Singapore's premier shopping belt are down 4.4 per cent this year.
Average prime rents for the suburban areas fell a smaller 0.7 per cent to S$29.45 psf/month from the first Jan-March quarter and are 2.8 per cent lower year on year.
"This sub-market is relatively more resilient as prime suburban rents only began to fall in the last quarter of 2015," said CBRE.
Said Desmond Sim, CBRE's head of research, Singapore & South East Asia: "Our research shows a clear reduction of rentals and it would not be accurate to report otherwise, as the retail sector is still undergoing restructuring and is currently an occupiers' market."
But while rents remained under pressure, Mr Sim said there were "still sparks of activity, particularly around well-located and well-managed suburban malls that have a strong positioning tilted towards families and the immediate catchment such as Compass One, which recently reported 90 per cent precommitment."
He added that with no foreseeable new supply in Orchard Road and Marina Centre in the next few years at least until 2019, there should be some support for prime rents in Orchard Road for the next half of 2016.