Singapore retail vacancies could worsen warns property consultancy Cushman & Wakefield (C&W).
In a briefing paper, C&W says brick-and-mortar retailers will likely continue to consolidate store networks to address rising eCommerce sales and higher overheads.
The company cited MasterCard data showing consumer confidence has fallen to its lowest level since June 2009 during the first six months of this year.
“Despite an increase in tourism arrivals of 7.2 per cent and 6.7 per cent year-on-year in June and July 2016, respectively, retail sales continued to stay in the doldrums. Retail sales, excluding motor vehicles, fell 3.2 per cent and 2.3 per cent year-on-year in June and July 2016, respectively, a testament that tourists are spending less and the Great Singapore Sale (GSS) has lost its lustre,” said C&W.
“Watches and jewellery, telecom apparatus and computer segments saw bigger declines as consumers were more cautious when spending on big-ticket items. Even the food and beverage segment was not spared as retail sales for the segment fell 7.4 per cent year-on-year in July 2016.”
C&W’s concern would appear a little more pessimistic than another property company, Edmund Tie & Company, which on Friday said while retail rents had fallen in the latest quarter, the outlook was not so grim with signs Orchard Rd precinct rents were now holding their own, partly buoyed by new entrants.
According to Edmund Tie research, average monthly retail gross rents across the island eased by 1.2 per cent quarter-on-quarter to about $29.30 per sqft in the three months to September 30. This was 9.6 per cent lower than its peak in the first quarter of 2015, when the average monthly gross rent was about $32.40 per sqft.
