Large catchment areas will continue to boost suburban malls.
The chart from Savills Research & Consultancy shows the prime rental rents of the Orchard Area and Suburban Area from for the past ten years.
In 2019, retail rents in Orchard Area is expected to rise by up to 2% amidst shortage of new supply, according to Savills. Meanwhile, the rental market of prime units in suburban malls is likely to increase 2% as well, due to high shopper traffic and large catchment areas.
Savills prime monthly rents in the Suburban Area held stable at $28.80 per sqft despite the surge in vacant stock. This is because of suburban malls continuing to enjoy the proximity to high catchment areas such as major residential estates and transport nodes.
There was a drop in vacancy in the Orchard Area, but Savills prime monthly rents for the area remained at $29.90 per sqft for three years as tenants remained cost conscious. Rents did not grow in tandem, as tenants were still sensitive to any changes to fixed costs.
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