Here's why Orchard Road will be global retailers' favorite hub soon

But prime rents will stay firm.

According to Savills, prime space on Orchard Road will continue to be highly sought-after as Southeast Asia becomes the go-to destination for international retailers.

The International Monetary Fund tipped the developing ASEAN economies to grow by 5.9% this year and 5.5% in 2014, supported by domestic demand and government spending.

Here's more from Savills:

Together with the limited supply remaining this year, we expect prime rents on Orchard Road to stay firm. All eyes will be on the take-up rate of new supply to be released next year, including 268 Orchard Road and Robinsons’ space in Centrepoint.

Over in the suburbs, a looming pipeline supply could shift the retail mix towards more F&B and anchor tenants, which might yield lower returns overall.

However, we do not expect a material adjustment in suburban rents at this juncture as the local economic fundamentals are still strong and we maintain that the pipeline supply is located in towns with large population bases.

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