Chart of the Day: Retail rental growth in Singapore is still negative

OCBC Investment Research cited data URA which said the Retail Rental Index fell 0.5% QoQ in Q2 2021.

This chart from OCBC Investment Research showed that retail rental growth in Singapore remains to be negative, citing data from the Urban Redevelopment Authority (URA) and internal estimates.

The URA Retail Rental Index fell 0.5% quarter-on-quarter during the second quarter, the sixth consecutive quarter that the index dipped. However, the magnitude of the decline is smaller compared to the 2.3% to 5.2% decline recorded since the first quarter of 2020. 

OCBC Investment Research said that the leasing environment is still “soft,” which suggests that negative rental reversions “are likely to persist as landlords place priority on defending occupancy rates.”

It also noted that retailers and landlords are increasing their presence online and adopt omnichannel strategies, citing as an example the Frasers Centrepoint Trust, which has at least 50% of its food and beverage tenants on the Frasers Makan Master app, posting and increase by 5x and 4x in sales and orders, respectively, since the start of 2021.