Retail vacancy rate falls to 10-year low with strong demand in 2024

Demand may rise with tourist arrivals in 2025 but could be offset by outbound travel.

The retail islandwide vacancy rate continued to fall for four consecutive years to a ten-year low at 6.2% year-on-year (YoY) in Q4 2024 from 6.5% a year ago, Savills reported.

Vacancy rates in Downtown Core and Orchard also dropped to approximately 5.5% and 6.2% respectively.

In terms of demand, the Downtown Core Planning Area recorded a slight increase of 4.2%, outperforming the rest of the regions which all recorded positive net demand in 2024.

“Notably, the higher demand in the Downtown Core and Orchard Planning Area could be driven by the arrival of new foreign brands as the tourism recovery bolstered retailers’ confidence level,” Savills said.

On the flip side, Savills noted that whilst tourist arrivals are expected to rise to between 17 million and 18.5 million, their positive impact on the retail industry could be partially offset by increasing outbound travel in 2025, which may reduce local spending.