Prime retail rents edge up 0.4% in Q2

Occupier demand remained modest as economic uncertainty weighed on consumer and tourism spending.

Prime retail rents reached $37.89 psf per month in the second quarter of 2026, increasing 0.4% YoY, according to JLL.

Meanwhile, the islandwide retail vacancy rate declined marginally to 1.5%. Year-to-date net absorption totalled approximately 20,000 sq ft, with no new retail space completed.

JLL said occupier demand remained modest during the quarter as inflationary pressures linked to Middle East tensions affected consumer confidence.

Tourism activity also weakened amid higher travel costs and global economic headwinds. Retail store closures continued, particularly in suburban areas, as businesses faced a challenging operating environment.

Vacancy rates declined in the prime and secondary submarkets, reflecting the stronger performance of higher-quality properties. Suburban vacancy rose slightly due to weaker household spending.

Rents increased marginally across all retail submarkets during the quarter, although performance varied by property quality. Assets in strategic locations with strong tenant mixes remained more resilient, whilst weaker properties faced downward rental pressure.

Capital values increased in line with rents, whilst investment yields remained stable.

JLL expects higher energy and supply-chain costs, softer consumer demand and weaker employment prospects to limit rental growth. These pressures could also lead to further store closures and higher vacancy despite limited new supply.

The consultancy expects the stable rental outlook to support capital values, with yields likely to remain steady.

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