Singapore Q1 private retail vacancy rate hits 10-year lows

The vacancy rate for private retail spaces declined to 6.6% in Q1.

According to a Savills report, the islandwide vacancy rate for retail space in Singapore inched up 0.2 of a percentage point (ppt) QoQ to 6.7% in Q1. This is a reversal after three quarters of consecutive falls. Nonetheless, it was largely due to muted demand in the public sector. 

“Compared to 6.7% in Q4/2023, the islandwide vacancy rate for private retail space decreased to 6.6% in Q1/2024, the lowest since Q4/2014. As the market sentiments improved alongside the recovery in tourism numbers, demand for retail space at tourist-dependent submarkets such as Orchard Road increased, easing the private vacancy rate in Orchard Area by 2.3 ppts QoQ to 6.4% in Q1,” the report said.

Here’s more from Savills:

On the contrary, retail vacancy rate in Suburban Area is under pressure as spending in suburban malls weakened with more people returning to office and travelling overseas. Compared with 3.9% in Q4/2023, the vacancy for private retail space in the Suburban Area went up to 4.4% in Q1/2024. 

The Urban Redevelopment Authority’s (URA) retail rental index in the Central Region slipped by 0.4% QoQ in Q1, extending the 0.1% decline in the preceding quarter. While some areas saw modest demand for retail space, prime and well-managed malls with healthy footfall continued to see strong interest. Coupled with the tourism recovery, popular tourist destinations such as Orchard Area continued to see further rental growth. 

Savills basket of malls showed that the average monthly rents in Orchard Area increased 0.7% QoQ to S$22.80 per sq ft in Q1, a rise for nine consecutive quarters. On the other hand, the average retail passing rent in Savills basket of retail properties in the Suburban Area remained unchanged at S$14.70 per sq ft in Q1.