S’pore is No 22 globally in retail rent rise

Source : Business Times - 20 Nov 2008

The Republic is among the top 25 cities for rising retail rents, according to the latest global survey by CB Richard Ellis (CBRE).

The average super-prime Orchard Road rent of $54.40 per sq ft (psf) per month in the third quarter of this year was 5.2 per cent higher than $51.70 psf in Q1.

This made Singapore the 22nd fastest-rising retail rent city over the six-month period in local currency terms. In top spot was Tel Aviv, with a 33.3 per cent increase, followed by the Portuguese city of Oporto, Abu Dhabi, Valencia and Lyon. China’s Guangzhou ranked seventh, with a 16.3 per cent rise in rent, Shanghai, ninth with a 12.9 per cent increase and Hong Kong 10th with an 11.1 per cent rise.

In terms of most expensive global retail rents, Singapore inched up from 19th in the Q1 2008 ranking to 17th in the latest ranking. CBRE’s rankings are based on annual retail rents in US dollars psf.

A separate survey by Cushman & Wakefield, also released yesterday but covering a different study period, shows Singapore slipping two positions to emerge as the world’s 16th most expensive location for retail rents in June this year, from 14th in June 2007. The rankings are based on annual rents in US dollars psf.

In Singapore-dollar terms, the monthly Orchard Road rental appreciated 9.3 per cent from $42 psf in June 2007 to $45.90 psf in June this year, said Cushman & Wakefield Singapore’s managing director Donald Han. He predicts that the June figure next year will be flat at around $44-46 psf.

Mr Han acknowledged that competition for tenants is growing, with the expected completion of new Orchard Road malls next year including Ion Orchard, Orchard Central and 313 @ Somerset.

‘The days of new malls here achieving 100 per cent occupancy at least one year before completion are probably behind us,’ he said.

Despite growing competition for tenants, Orchard Road rents will continue to be supported because ‘it is the obvious target for new retail demand, for instance, for new brands entering Singapore’, Mr Han said.

New York’s 5th Avenue retained top spot in Cushman’s latest June 2008 ranking, with annual rent of US$1,850 psf. Hong Kong’s Causeway Bay, with rent of US$1,784 psf, kept its No 2 ranking, followed by Avenue des Champs Elysees in Paris at US$1,134 psf.

CBRE’s ranking placed New York, Hong Kong and Moscow in the top three spots.