Retail property market holds steady in Q4 2025 despite fall in visitor arrivals:

The impact on rents is expected to be cushioned by a limited retail supply pipeline.

Retail property market remained stable in the fourth quarter of 2025, supported by resilient domestic demand and limited new supply, even as international visitor arrivals declined, according to Realion.

International visitor arrivals fell to 4.0 million in Q4 2025, an 11.2% QoQ decline from the previous quarter. Despite the quarterly dip, full-year arrivals reached 16.9 million, and the Singapore Tourism Board projects visitor numbers to rise to 17.0 to 18.0 million in 2026.

Leasing conditions across the retail sector remained generally steady. Island-wide retail occupancy edged up to 93.7% in Q4 2025, from 93.1% in the preceding quarter, reflecting sustained tenant demand despite a softer tourism backdrop .

Performance varied across sub-markets. Fringe and suburban locations continued to outperform, with occupancy rising from 93.6% to 94.2%, underpinned by resilient local spending and demand from food-and-beverage operators as well as essential goods and services retailers.

In contrast, Orchard/Scotts Road saw a slight easing in occupancy to 93.2%, down from 93.5%, attributed to ongoing tenant rotation and selective consolidation by retailers.

Meanwhile, Other City Areas recorded an improvement in occupancy, rising from 91.8% to 92.7% during the quarter. The increase was largely absorption-led, as newly completed retail spaces were progressively taken up by operators.

Retail rental levels were largely unchanged in Q4 2025. Prime first-storey rents on Orchard/Scotts Road held steady at $41.85 per sq ft, whilst Other City Areas remained flat at $19.60 per sq ft.

Fringe and suburban rents increased marginally by 0.4% QoQ to S$34.65 per sq ft.

Looking ahead, Realion expects retail rental growth to remain modest, as manpower constraints and rising operating costs continue to temper retailers’ expansion plans.

However, the impact on rents is expected to be cushioned by a limited retail supply pipeline, which should help support occupancy levels and keep the market broadly stable in the near term.

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