the the latest data from commercial real estate services company CBRE showed that in the first quarter of the year, the average prime commercial rent for suburban areas rose 2.2 percent year-on-year, while retail rent for spaces on Orchard Road fell 2%.
Prime retail rent refers to the rate for stores that have the best presence, footfall and accessibility in a mall – typically those on the first level or floors with direct connectivity to the MRT rail network.
With Singapore’s border easing and nationwide Covid-19 restrictions, property analysts expect rents in the Core and Orchard Road areas to rise.
Mr. Derek Tan, head of property research at DBS Bank, said he expects core retail store rent to continue to grow, albeit at a slower pace. than that in the Orchard Road area.
He added that rental rates in the core won’t be as steep as for commercial spaces in the Orchard Road area, where the return of more tourists is expected to boost sales for stores in the area, which are now around 70% of pre-levels the pandemic.
Leonard Tay, head of research at property consultancy Knight Frank, expects rental prices to bottom in the second quarter of this year before improving.
For the whole year, it provides the prime commercial rent will increase by 2 for 4 percentwith suburban retail rents are rising faster than those located along Orchard Road because tourist arrivals may not rebound any time soon.
By the calculations of Colliers commercial real estate services companythis expects prime commercial rents in the Orchard Road area to recover and increase by around 1-2% by the end of the year.
He also expects the retail difference rental rates between Orchard Road and suburban areas to widen again with the stronger recovery in the central commercial belt.
This difference of rates had previously fallen from 33.2% in the fourth quarter of 2020 to 15.8% in the first quarter of this year.
WHAT THE DEVELOPERS SAY
In response to today’s questions, real estate group Far East Organization said it understands the difficulties some of its tenants are facing and will engage them on their concerns.
“Far East Organization continues to strive to be fair and equitable with its tenants so that togetherwe are able to survive and navigate through the changing business landscape and recent challenges,” he added.
“Ultimately, we want to maintain momentum,-term and a positive relationship with our partners.
the goods The developer operates 17 shopping malls in Singapore, including Clarke Quay Central, Orchard Central and Junction 10.
Frasers Property, which has 13 shopping centers in its portfolio including Century Square, Tiong Bahru Plaza and The Centrepoint, said it was offering tenant support. when sales went bad affected by Covid-19.
These include rent discounts, marketing initiatives, flexible renewals and operational support.
“Rental sustainability is important to both the landlord and the retailers and is an important consideration in our lease discussions,” Frasers Property told TODAY.
He added that he expects prime suburban commercial space to continue to attract good rental demand and that rental prices should remain competitive.
“We will continue to work with our tenant community to create a mix of tenants that meets the needs of our community and provides an exciting shopping experience,” he added.
For Mr. Lim, the former owner of a fish soup shop, passing the bakery business was a way to cut costs and “Covid-proof” his business by relying more on online sales.
The shop owner space where his bakery stalls had reduced the monthly rent from S$2,700 to S$1,300 last October for a year.
Now that COVID-19 restrictions have largely eased, Mr Lim said his landlord planned to raise the rent to S$2,500.
If that happens, he will close his store and operate his home bakery.
“There is no point in negotiating,” Mr. Lim said. “If the rent goes up, I’ll go.”