Which prime retail submarket will post the highest rental growth in 2022?
The top submarket is poised to grow by 4.2% YoY.
Among the three prime retail submarkets, Orchard is expected to post the highest rental growth for the year of 4.2% YoY as local tourism continues to recover.
By 2023, the submarket will likely post a 2.5% YoY growth.
Behind Orchard is the Suburban submarket where rents are expected to grow by 3.8% YoY, according to Cushman and Wakefield (C&W).
“Suburban prime retail spaces remain sought after by retailers and are supported by nearby residential catchments and hybrid work. This is reflected by tight vacancy rates of 6.1% as of Q3 2022, in suburban retail areas,” C& W commented.
Next year, the submarket is poised to grow by 2.0% YoY, fueled by inflation and a limited supply of prime retail space.
“While retail operating conditions remain challenging, limited new retail supply and inflation would help support rental growth. New islandwide retail supply will only come up to 0.3 million sf per annum from 2023 to 2027, less than half the 0.8 million sf per annum from 2017 to 2022,” C&W commented.
Meanwhile, C&W forecast that rents in the City Area will increase by 1.5% YoY in 2023, given that hybrid work will persist.
“low levels of new office supply would temper the recovery of footfalls in the CBD,” the property expert commented.
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