S'pore ranked 17th most expensive retail location
globally
SINGAPORE : Singapore has moved up one spot to become the
17th most expensive retail location in the world.
According to the latest CB Richard Ellis (CBRE) Global
MarketView report on the retail sector, prime retail rents in
Singapore stood at US$436 per square foot (psf) per annum in the
first quarter of this year.
It said prime retail rents in the world's leading shopping
destinations have stabilised in most markets in the first
quarter.
The report said as the global economic recovery begins to gather
momentum, consumer and retailer confidence have started to
improve.
While this has still not translated into retail sales growth in
most markets, demand for prime retail space remains healthy and
vacancy in the best locations is low, it added.
As a result, there are a number of major cities where prime rents
are rising, and many more where the rate of decline has slowed or
rents are now stable.
New York City remained the world's most expensive retail
destination, with prime rents at US$1,725 psf/annum. Sydney was in
second place globally at US$1,155 psf/annum, while Hong Kong ranked
third at US$974 psf/annum.
London remained in fourth place, after recording a 20 per cent
annual increase in rents since the first quarter of 2009 to US$861
psf/annum. Paris rounded out the top five locations with rents of
US$791 psf/annum.
Tokyo stayed in seventh position globally, with rents of US$711
psf/annum, while Brisbane moved up one place from the fourth
quarter of 2009 to rank eighth at US$668 psf/annum, and Melbourne
remained in 10th place at US$568 psf/annum.
CBRE said the Australian economy is growing strongly, with an
expanding workforce and falling unemployment. However, higher
interest rates have fuelled consumer caution and prevented any
significant increase in retail sales.
The report said the Asian region is helping to lead the recovery,
with retail markets generally stabilising or strengthening in the
first quarter.
It added that with the exception of Japan, retail leasing activity
in major Asian cities continued to pick up and a number of
international retailers are looking to expand their footprint
across the region, particularly in Singapore, Hong Kong, Beijing
and Shanghai.
Letty Lee, director, Retail Services in Singapore, CBRE, said: "The
retail landscape changed dramatically over the past year. Singapore
has been successful in attracting a sizeable number of global
brands and new-to-market concepts due to an abundant choice of
prime pipeline supply in the Orchard Road and the Marina Bay area.
That in turn has put some pressure on prime retail rents."
However, CBRE said there is a risk of supply imbalance in markets
like China and India, where a large amount of shopping centre
construction will be delivered over the next nine months.
As for Latin American markets, some cities like Mexico City and
Santiago have seen the strongest growth in rents, showing 12 to 13
per cent on-year growth in rentals.
- CNA/al