Prime Orchard Road rents register biggest increase since 2007

It has risen five percent from the second quarter of 2011 to average $31.60 psf/ month.

According to a release by CB Richard Ellis, With supply in Orchard Road showing little increase and demand keeping steady, prime rents in Orchard Road have registered its biggest increase in Q3 2011 since 2007. It has risen five percent from the second quarter of 2011 to average $31.60 psf/ month. Average rents in Orchard Road were $30.11 psf/ month last quarter. The upturn in rents follows a series of dips since 2008. CBRE’s analysis shows the biggest decrease in 2009, when prime rents dropped to $32.40 psf/ month, a 10.2 decrease from 2008.

Letty Lee, Director, Retail Services said “We are witnessing almost full occupancy at Orchard Road malls. New-to-market brands continue to actively explore taking up Orchard Road space, encouraged by fresh opportunities offered by newly available large prime space including the recent exit of Borders at Wheelock Properties. Rentals should hold steady for the fourth quarter”.

Following the opening of several new malls in Orchard Road in the last couple of years, retailers have come to expect greater visibility and accessibility for their stores. Older malls have revamped to stay relevant and keep up with such demands. Such new layouts and concepts have made Singapore a more attractive shopping destination for retailers and shoppers.

The retail scene was dominated by fast fashion brands in Q3 2011. The wide acceptance of Forever 21, Cotton On and Uniqlo spurred two other fast fashion brands which made their first foray in Singapore during the quarter. Aeropostale opened an outlet each in VivoCity and CityLink Mall as well as a 22,000-sf store in Ion Orchard. H&M opened its 30,000-sf flagship shop in Orchard Building. Abercrombie & Fitch announced that its 21,000-sf shop
in Knightsbridge will open in December 2011.

In September, the two crystal pavilions in Marina Bay Sands opened its doors. One of the pavilions houses Louis Vuitton’s 41,000-sf nautical theme store. Besides bags and accessories, the four-storey development also contains a bookstore, art gallery, private lounge and a floating jetty. Two nightspots, Avalon and Pangaea, occupy the other pavilion.

It was announced that the 40,000-sf Greenwich V, located along Seletar Road, had achieved full occupancy before its TOP in December 2011. Besides Greenwich V, the 207,000-sf J Cube is also expected to receive TOP in Q4 2011. CBRE estimates that some 657,000 sf and 1.57 million sf of retail space will be completed in 2012 and 2013 respectively. Prime Suburban rents increased by 2.9 per cent q-o-q and 2.6 per cent y-o-q to $29.75 psf/month in Q3 2011.

The fourth quarter will see the opening of the final 12 stations on the Circle Line along various landmarks including Holland Village, Harbour Front, Botanic Gardens, one-north. The Holland Village MRT station which will greatly ease the persistent carpark problems faced by shoppers at the bohemian shopping enclave. This might help bring more footfalls to Holland Village and attract more retailers to set up shop. Furthermore, NParks has indicated that a land parcel in Holland Village is available. The successful bidder can build a 1,130-sf cafe on the site with an expected completion date in mid-2012.

NParks is also looking for F&B tenants for the upcoming Gardens by the Bay. Dining while surrounded by greenery will add a new and possibility winning dimension to the F&B scene in Singapore.