Ka-ching! Tourist retail up 35.7% to an incredible $4.98b
But continued appreciation of Sing dollar may impact inbound tourist numbers as well as spending.
According to Pacific Star Group, stronger retailer demand in the prime retail market, supported by an improving tourism and domestic spending, should set an upward momentum for rents.
Pacific Star Group released its property market snapshots for Singapore:
- Singapore experienced a strong start to the year with the 1Q11 GDP registering a growth of 8.3% y-o-y. Growth was driven by a surge in pharmaceutical output growth and a steady push from the service sector
- Inflation peaked in March 2011 at 5.0% y-o-y but is set to ease going forward. However, it is still expected to remain above the historical norm of 2%
- The MAS is expected to maintain its policy of gradual appreciation of the Sing dollar in view of the inflationary pressure.
- Demand continues to be driven by strong economic growth and business sentiment. Given the trend of relocation, opportunities will arise in older offices that are in good location with enhancement/ repositioning potential.
- Strong tourist arrivals in 2011 have boosted retail, tourism and other related services segment. Tourism receipt was S$4.98 billion, a 35.7% y-o-y growth.
- A relaxation of immigration policy could help spur housing demand and retail spending.
- Higher than expected absorption for the significant pipeline of prime office space that is scheduled to be completed between 2011-2012 could provide further upside for the sector.
- Stronger retailer demand in the prime retail market, supported by an improving tourism and domestic spending, should set an upward momentum for rents.
- The continued appreciation of Sing dollar in the coming quarters may impact inbound tourist numbers as well as spending.
- Government continues to address housing affordability with various measures targeting at both demand and supply.
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