Retail space rents flat in Q3 but sale prices shoot up
Rents for retail space - from prime sites around Orchard Road to suburban outlets - flatlined in the third quarter but sale prices shot up.
The rising cost of buying retail units has put the biggest squeeze on yields for landlords of any quarter in the past year. Consultancy DTZ said in a report last Thursday that retailers remain cautious about renting space given a slowdown in the regional economies and a tighter labour market. It noted that even as retailers are opening new stores, other less profitable ones are being shut.
The result is that the average gross fixed rent of prime retail space in areas around Orchard and Scotts roads stayed flat at $30.33 per sq ft (psf) per month for the three months to Sept 30. Suburban rents were unchanged at $28.35 psf per month.
Ms Anna Lee, DTZ's director of retail, noted that landlords are continually introducing new international retailers who can attract shoppers and differentiate their tenant mix from other malls.