Singapore rises to 18th in global ranking of retail rents

Source : Business Times – 2 July 2009

38% of top global retailers have presence here, CBRE survey finds

SINGAPORE moved up a notch to 18th position in a ranking of the world’s most expensive retail locations at end-Q1 2009, from 19th position at end-2008, according to CB Richard Ellis’s latest Global Retail Market View.

Singapore also emerged 11th in CBRE’s ranking of the top 15 Global Retail Cities as at the end of last year. This was based on the percentage of leading global retailers present in cities. London was number one (59 per cent), followed by Paris (50 per cent), New York (47 per cent) and Dubai (46 per cent). About 38 per cent of top global retailers have a presence in Singapore, slightly lower than Tokyo (39 per cent).

The average super prime retail rental value along Orchard Road at the end of the first quarter was US$408 per sq ft per annum, or S$51.80 psf a month.

Giving an update, CBRE in Singapore said the figure for end-Q2 2009 was S$49.80 psf per month, down 3.9 per cent from the preceding quarter and 8.5 per cent lower than in the year-ago period.

‘Going forward, we expect the rate of rental decline for prime space along Orchard Road to ease given the healthy demand for existing shop space as well as high pre-commitment levels seen at yet-to-be-completed malls,’ said CBRE’s director, retail services, Letty Lee.

About 2.5 million sq ft of new shop space will be completed here this year, followed by a further 2.2 million sq ft next year.

CBRE’s Global Retail Market View shows New York remains the world’s most expensive retail location, with an average rental value of US$1,800 psf per annum in the latest end-Q1 ranking. This was despite a 10 per cent year-on-year rental decline.

Hong Kong held on to second place. But Moscow overtook Tokyo to grab the third place. Paris ranked fourth and Tokyo fifth.

CBRE notes that prime retail rents have fallen in almost every region worldwide, as the global recession hits consumer sentiment and retail sales.

‘Demand for retail space has declined in most markets as consumers cut back on spending and unemployment continues to rise in many countries,’ it says.

‘Emerging and less established markets have been most significantly affected. Buenos Aires saw the largest annual decline in retail rents year on year with a drop of 37 per cent, followed by Warsaw with a 33 per cent decline and Washington with a 26 per cent decline.

‘While some markets have continued to experience year-on-year increases in retail rents, in many cases the current pressure is downward.’