PDF versionSingapore, - The Urban Redevelopment Authority (URA) released the Retail real estate statistics for the second quarter of 2008 (2Q2008) today.
The growth in retail rentals and capital values of shop space, driven by limited supply and strong demand, were largely in line with expectations while occupancy rates surpassed the previous high point last quarter.
Islandwide retail rentals, based on lease that has commenced, maintained form to grow by 15.6% year-on-year this quarter. Compared to last quarter, retail rental growth accelerated by a robust 5.2% qoq. Despite concerns over the poor economic outlook in the US, demand for retail space in Singapore has continued to grow strongly, especially in the city area, boosted by new shopping malls along Orchard Road offered for lease.
Occupancy rates surpassed its previous high point last quarter as retailers continue to vie for quality retail space. Coupled with a slight drop in available retail stock, islandwide occupancy rates inched 0.1 percentage point higher than that in 1Q 2008 to reach 93.7%. Only during the period between 2Q 1992 and 1Q 1993 has occupancy rates been higher.
Approximately 970,000 sq ft of retail space is likely to be completed by end of this year with Iluma and West Coast Plaza shopping centre being the major contributor. As both ION and Orchard Central has postponed their opening dates to early to mid-2009. An estimated 3.8 million sq ft of retail space is expected to be completed in 2009.
Though consumers spending are expected be adversely affected by the rising inflation and high energy prices, the retail scene is likely to remain the bright spot for the domestic property market for the rest of 2008. Retail rentals are forecasted to grow by a further 2% to 5% quarter on quarter in 3Q 2008 and about 9% to 15% for the whole of 2008.
Nicholas Mak, Director of Consultancy & Research Department, Knight Frank, +65 6228 6821
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