Global Ranking: 26th
· Rents for prime retail space in Orchard Road had moved up a notch from 27th in the 2010 survey to 26th in 2011.
· In US Dollar terms, prime rents in Orchard Road had risen by 10.8% year-on-year to US$366 per sq ft per year as of 1Q 2011. However, the increase in rent was due to the strengthening of the SG dollar against the US currency. In local currency terms, prime rents in Orchard Road stayed unchanged at 1Q 2010’s level of S$462 per sq ft per year.
· Overall, rental growth was kept in check, as retailers remained cost conscious in the wake of rising inflation and higher operating costs. In addition, the Orchard Road retail market is still adjusting to the influx of over 1.3 million sq ft of new retail space in 2009.
· Nonetheless, there is potential for prime retail rents in Orchard Road to register some upside for the whole of 2011. This is taking into account – the expected healthy tourism arrivals and generally-positive consumer sentiment, as well as the reduction in new upcoming supply of retail space on Singapore’s premier shopping district.
Asia Pacific Ranking: 7th
· Prime retail space in Orchard Road has slipped by one placing from the sixth place in 2010 to seventh in 2011 on the Asia Pacific scale. This was due to the addition of Hong Kong’s Queen’s Road, Central in the latest survey. Excluding this street, rents in Singapore’s Orchard Road remained at the sixth position – similar to the past two years.
· Prime rents in Orchard Road in 2011 are now more competitive than those on the premier retail corridors of Hong Kong, Sydney, Tokyo and Brisbane than in 2010, as the gap in rents has widened.
· Likewise, Singapore’s competitiveness against its less-costly neighbours such as Shanghai, Beijing and Delhi has worsened because the rental gap has narrowed. In particular, the rental gap between Singapore and Shanghai has narrowed from 30.6% in 2010 to 12.3% in 2011.