Retail Market Update Q1 2024

• In 2023, the Singapore Tourism Board (STB) reported a total of 13.6 million visitor arrivals, falling within its forecast of 12 million to 14 million visitors. As of February 2024, visitor arrivals have stabilised with at least one million each month for a year since March 2023. With the first two months of 2024 recording 1.4 million visitors each, visitor arrivals to Singapore are steadily approaching pre-pandemic norms. Many globally acclaimed events were held in Singapore in the first three months of the year, such as concerts by international acts and the biennial Singapore Airshow. In addition, the implementation of the mutual 30-day visa-exemption arrangement between Singapore and China in early February contributed to Chinese tourists regaining the pre-pandemic lead as the top source of arrivals in the first two months of 2024.

• Retail spending slowed in January and February, as retail sales (excluding motor vehicles) fell from S$4.2 billion in December to (Exhibit 2) to S$3.8 billion and S$3.4 billion respectively. Likewise, online retail sales declined 1.6 percentage points (pp), from 14.5% in December to 12.9% in January and further declined 0.2 pp, reaching 12.4% in February. The visible decline in spending was due to the peak in December 2023 during the festive period in addition to pre-GST hike purchases, especially for big-ticket items, before the GST increase to nine percent took place on 1 January 2024. Thereafter, retail activity eased to normative levels in the first two months of 2024.

• In Q1 2024, Singapore took the spotlight in Asia, as many international acts made the city-state a major stop on concert tours. In certain instances, Singapore was the only stop in Asia. International acts such as Coldplay, Mayday and Taylor Swift attracted many concertgoers from the region, and boosted Singapore’s economy by up to an estimated S$500 million from their collective arrivals and consumer spend. Additionally, the biennial Singapore Airshow in February was attended by several international stakeholders involved in the global aviation industry. Air travel of within seven hours from most of the Asia Pacific’s gateway and capital cities has placed Singapore at the forefront of Asia, as a location that has the infrastructure and economic capacity to organise and host world class events.

• Visitor arrivals to Singapore will continue to grow, and rents and occupancy levels are expected to stay at healthy levels for the rest of 2024. Many existing retailers of both local and international origins will continue to look for expansion opportunities to build a stronger presence in Singapore, in order to cultivate brand awareness in the increasingly affluent Southeast Asian market. For the whole of 2024, prime retail rents are envisaged to increase between 2% and 4%.

Full report here