Singapore retail vacancy rate hits record high of 9.6% in Q2

[The_King]

According to Savills, compared with the early outbreak phase at the start of the year, the retail market felt full impact of the pandemic in Q2/2020. The effects were the result of the CB and social distancing measures.

With the increasing number of retail and F&B closures as well as business consolidation which left more retail units vacant, island-wide net demand of retail space shrunk by over 1.0 million sq ft (nett), reaching the highest contraction since the data was constituted in 2011. Coupled with an addition of 43,000 sq ft of new retail space in Q2/2020, overall retail vacancy rate soared to an all-time high of 9.6%.

Here's more from Savills:

Notably, vacancy level in Central Region rose by 1.7 percentage point (ppt) QoQ to its highest level of 10.3% in Q2/2020. As the pandemic forced more companies to adopt flexible and remote working arrangements, the office crowd in the Central Business District (CBD) has reduced significantly over the recent months. Owing to the sharp decline in visitor arrivals and closure of non-essential businesses in malls, the shopper traffic along main shopping belts like Orchard Area and Marina Bay Sands thinned visibly, further weakening the retail and F&B sales in those areas.

 

As a result, vacancy level especially in Central Region escalated in the reviewed quarter as more businesses which have no financial cushion to weather the coronavirus storm left the retail scene. Besides, new leasing of retail spaces also took a hit from the lockdown measures, affecting the take-up of new retail space. The leasing of retail space was at a standstill as retailers suspended decision-making due in part to their inability to make site visits and also in part their efforts to try to contain cost. While some tenants and potential occupiers may be re-negotiating for lower rents, most leasing decisions are on hold or pending for re-evaluation.

Although there were no notable leasing activities or new deals signed during the lockdown period in Q2/2020, the overall sentiments and rental expectations weakened as retailers struggle with anemic sales. The rental index for Central Area fell 4.9% QoQ to its lowest point since the data series was constituted in 2011. This is in line with the rental trend in Orchard Area where most businesses switched over to survival mode in an effort to stay afloat amid the travel restrictions.

In Q2/2020, Savills monthly prime rents in Orchard Area was down by 5.0% QoQ to S$27.40 psf, marking its second consecutive quarter of decline. Even though Suburban malls are generally more resilient with the nearby local catchment and necessity shopping, Savills monthly prime rents in Suburban Area dropped 3.0% QoQ to S$27.70 psf in Q2/2020 alongside lower footfall and shift towards online grocery shopping. This tightened the rental gap between Orchard and Suburban malls, and this was the first time that Orchard rents fell below Suburban rents since the data was constituted.

Edited September 2, 2020 by The_King

[socrates469bc]

most likely the vacancy is doubled.

 

going to the higher floors of ngee ang city and sommerset 313, u can see many shoplots empty.

[The_King]

10 minutes ago, socrates469bc said:

most likely the vacancy is doubled.

 

going to the higher floors of ngee ang city and sommerset 313, u can see many shoplots empty.

 

 

for how long already?

[socrates469bc]

27 minutes ago, The_King said:

 

 

for how long already?

 

most of the businesses were alrdy struggling b4 wuhan and has a high turnover rate.

 

now, can even start seeing empty lots on second floor of 313 liao.

 

i think will be a matter of time b4 all the beauty salons on ngee ann city 5th floor close down.

 

everytime go kino, dont even see anyone on 5th floor.

[The_King]

6 minutes ago, socrates469bc said:

 

most of the businesses were alrdy struggling b4 wuhan and has a high turnover rate.

 

now, can even start seeing empty lots on second floor of 313 liao.

 

i think will be a matter of time b4 all the beauty salons on ngee ann city 5th floor close down.

 

everytime go kino, dont even see anyone on 5th floor.

thanks

 

my type of mall to go to. there no one but me with aircon and empty space