_Retail Market Update Q3 2023
October 25, 2023
Highlights
- The third quarter of 2023 registered a total of approximately 3.9 million visitor arrivals, which is an increase of 72.5% y-o-y, and 14.5% q-o-q. Visitor arrivals typically increase in the second half of the year with more large-scale public events such as the National Day Parade in August, the Formula One Singapore Grand Prix night race and Singapore River Festival in September as well as the year-end holiday festivities.
- The average gross rent of prime spaces island-wide increased 1.1% q-o-q and 4.3% y-o-y to S$26.70 psf pm in the third quarter of 2023 (Exhibit 1), improving over the 0.5% q-o-q growth in the previous quarter.
- Prime retail rents in all micromarkets grew by more than 5% y-o-y, except for the suburban areas that registered a more moderate growth of 0.6% y-o-y, after having recovered much earlier than the retail spaces in the more central areas of the island.
- Online retail sales tracked stable performance comprising 14.2% of all sales in both June and July. However, this decreased by 0.4 percentage points (pp) to 13.8% in August, partly due to sales fatigue from frequent online promotional campaigns such as the monthly 1.1, 2.2 etc sales events on various online shopping platforms.
- With lessons learnt from the pandemic on the use of social media, retail operators have been able to combine the best of innovative online and traditional physical channels to connect with a larger customer base. As such, several local brands were able to marry both to draw large followings on social media that created viral bursts of sensational shopper interests and crowds.
- Barring any unforeseen global or regional upheaval, and notwithstanding the uncertain economic outlook, the retail sector in Singapore remains firmly on course to strengthen in 2023 and into early 2024. Prime retail rents should stay the course, increasing between 3% to 5% for the whole of 2023.
Read the full report here.
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