Landlords are urged to be flexible in setting rents to support occupancy rate in the coming quarters.
This chart from Colliers International shows that island-wide retail vacancy decreased by 0.2ppt QoQ to 7.3% in Q2 2018. On a YoY basis, vacancy has fallen by 0.8ppt since Q2 2017.
The decrease in retail vacancy together with a sustained rental decline is a proof of the sector’s re-balancing act with retail landlords lowering their rents to stabilised occupancy amidst the challenging market conditions, Colliers International noted.
Notwithstanding the anticipated vacancy spike in 2018 due to a large injection of supply, the firm thinks that overall retail vacancy rate appears to be steadily trending down to below 7% which is an improvement from the peak vacancy levels in excess of 8% during 2016 to 2017.
“We advise landlords to be flexible and practical about setting rents in order to support occupancy in the quarters ahead,” the firm commented.
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