Singapore retains 12th spot on list of major cities with the most expensive retail rents

SINGAPORE: Singapore has retained its position as the 12th most expensive city globally for retail rents, according to a recent report by real estate consultancy Cushman & Wakefield. The study reveals that the annual rent for retail space on the renowned Orchard Road was US$431 per square foot, showing a notable increase from the previous year’s US$404 per square foot.

The report, which analyzed retail rental trends across major cities worldwide, highlighted that despite maintaining its ranking, Singapore experienced a 6.9 per cent surge in annual retail rents. The city-state’s commercial hub continues to be an attractive but costly location for retailers.

Topping the list as the world’s most expensive city for retail rent is Fifth Avenue in New York City, where annual rents soar to an astounding US$2,000 per square foot. Following closely are Milan in Italy, securing the second position, and Hong Kong in third place.

Globally, the report indicated a 4.8% year-on-year increase in retail space rents. The Asia-Pacific region emerged as the leader in rental cost hikes, experiencing a substantial 5.3 per cent surge. Meanwhile, the Americas and Europe reported increases of 5.2 per cent and 4.2 per cent, respectively.

Despite the overall upward trend, the report unveiled a concerning reality for the retail sector. Over half of the world’s retail leasing markets have yet to recover to pre-COVID-19 rental levels. This finding suggests that the lingering impacts of the pandemic continue to shape and challenge the global retail landscape.

The data underscores the resilience of Singapore’s retail sector amid economic challenges, positioning itself as a key player in the Asia-Pacific region. However, the escalating rental costs may pose challenges for local and international retailers looking to establish or maintain a presence in the city-state. The dynamics of the retail market, influenced by economic recovery and pandemic-induced shifts in consumer behaviour, will likely continue to shape the trajectory of retail rents in the coming years.