_Retail Market Update Q3 2020

Key Highlights

• The retail sales index (RSI) in August fell 9.0% year-on-year (y-o-y). While this represented the 19th consecutive month-on-month decrease in the index, the fall in August was less severe than the preceding months, since the circuit breaker. 

• Of the total retail sales volume of S$3.4 billion in August, online sales accounted for 10.9% (S$372.9 million), led by the sale of Computer and Telecommunications Equipment, Furniture and Household Equipment, and Supermarkets and Hypermarkets.

• Islandwide prime retail rents fell by 10.3% y-o-y to average S$27.40 per square foot per month (psf pm) in Q3 2020. This was largely led by the 11.0% y-o-y fall in rents for prime retail spaces in Orchard.

• Average prime retail rents in the surburban region started to stabilise, recording the least decline of 6.9% y-o-y among the various micro markets, averaging S$26.60 psf pm. As more employees worked from home, malls located within residential population centres rose in visitorship.

• Increased activity in the retail sector hints at a possible bottoming out of rentals by end-2020 or early 2021. While overall retail rents are envisaged to decline by 10% to 15% for the whole of 2020, rentals of retailers in surburban regions are not expected to decline by more than 7.5% for the whole year.

At Knight Frank, we trade in innovative solutions, delivering marketing and leasing strategies, and providing the best development consultancy and investment advice. From advising owners on procuring business spaces to helping tenants locate the ideal workplace, our breadth of properties range from conventional warehouses and factories to high-tech business spaces. Recognising the uniqueness of each company’s space needs, we are committed to furnishing sound advice backed by intelligence that’s on the pulse of the latest market trends and conditions.