, Singapore

Retail sales report first contraction since Feb 2011

And yet just another reason to believe that Singapore's now in technical recession.

According to Savills Research, retail sales eased 0.7% year-on- year (YoY) in July, marking the first contraction since February 2011.

Anchor tenants and big-format stores have taken centre stage again, it said, creating spin-off demands under a
challenging retail climate, while the Southeast Asian growth story remained a pull factor for international retailers.

Malls in Jurong Gateway exhibited innovative asset enhancements to stay ahead of competition; while JCube is a hotspot for new retail brands and concepts, IMM will be Singapore’s largest outlet destination

Savills estimates that monthly prime suburban rents held firm at S$31.1 per sq ft while those on Orchard Road softened 0.8% to S$35.2 per sq ft.

Here's more from Savills:

Macroeconomic overview

The prolonged eurozone crisis, deceleration of the China and India economies, and strengthening of the Singapore dollar have taken a toll on the retail market. Despite the Great Singapore Sales, retail sales (excluding motor vehicles) failed to take-off, having eased 0.7% YoY in July, the first contraction since February 2011.
The watch and jewellery segment has been in a slump since May, although necessities expenditure, such as supermarkets, remained healthy, which could partly be attributed to Singapore’s expanding population.

Southeast Asia continued to be a bright spot, bucking the deceleration trend that plagues many nations. According to the International Monetary Fund, the ASEAN-51 economy is projected to grow 5.4% this year, up from 2011’s 4.5%. The Singapore brand as an investment destination2 makes it well-positioned to ride on this growth. Meanwhile, hefty government spending in areas such as housing, tourism and transport have sustained employment and helped to avert a hard landing. In its latest forecast, the Ministry of Trade and Industry estimated that the Singapore economy will expand by 1.5% to 2.5% this year.

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