Retail rents to see a sustained recovery in 2023
EDMUND TIE expects full-year rental growth of 1%-3% for prime retail spaces.
Despite the challenges faced by the retail segment like manpower shortage and higher operating costs, real estate experts believe that rents in the segment will see a sustained recovery this year.
CBRE said “improved mobility, tourism recovery and a below-historical-average new retail supply in the next few years” will support the segment’s recovery in 2023.
EDMUND TIE added that tourism recovery will also support the retail segment, especially with upcoming events like Grand Prix and high-profile concerts, and new retail and entertainment openings.
“For instance, The Palawan@ Sentosa, a new entertainment precinct, has just opened, featuring an electric go-kart experience called HyperDrive and an 18-hole mini golf course, along with numerous other attractions scheduled to launch in the coming months, as the island destination’s rejuvenation continues apace,” EDMUND TIE said.
“We can also expect Asia’s first snow, ski and skate attraction, Trifecta by The Ride Side, at Somerset. The stronger return of tourists from Mainland China will be an added boost to retail spending, as well as the frontloading of purchases ahead of the GST hike next year. Inflationary pressures are subsiding steadily, and we expect local spending to pick up gradually in the coming months," EDMUND TIE said.
EDMUND TIE experts Prime first-storey rents in Orchard to lead rental growth in 2023, with an expected 4%-5% growth.
CBRE echoed this, adding that City Hall/Marina Centre will also lead rental growth for the year.