Hopes fade for a better retail market scene in the last three months of the year

Retail occupancy rate likely to range between 90-92% in Q4.

Challenging retail landscape is expected to moderate rents further in 4Q.

According to Knight Frank, average rents in the Central Region are envisaged to fall by 6.0% to 8.0% y-o-y by Q4 2016, while the more resilient prime rents are likely to moderate downwards by up to 3.0% y-o-y in the same period.

The expected fall in rents, it said, takes into account not only the projected weakened demand from retailers, but also the likelihood of landlords readjusting the rental structures to help their tenants tide over down cycles of the market in order to maintain healthy occupancy status.

Knight Frank noted in a report that an estimated 1,072,000 sq ft of net lettable major retail space is slated for completion in the whole of 2016. Out of this, 38.2% (409,000 sq ft) was ready in the first half of 2016, with the remaining 663,000 sq ft to be completed in H2 2016.

Knight Frank added that there is cautious stance taken by retailers towards business expansion, and island-wide occupancy is likely to fall from 92.8% in Q4 2015 to between 90.0% and 92.0% in Q4 2016.