Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
Prospective measures include restricting the amount of F&B permits provided within a certain location, capping the proportion of net lettable location designated for F&B in a mall to a stakeholder-reviewed proportion, or enforcing a tax obligation on F&B chains that increase past a specific range of avenues within a designated period. “These can all serve as a call for F&B drivers not to bite off greater than they can chew and spread out the development of F&B to a more acceptable and lasting pace,” adds Hsu.
Together, the F&B situation has actually viewed an accelerated speed of dining establishments setting up and closing, incorporates the Knight Frank statement. In 1Q2025, F&B labels consisting of Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their shops, whilst hotpot chain Haidilao shut two shops.
Singapore prime retail rentals remained greatly flat in 1Q2025 amid a retail setting that continues to deal with increasing operating expense and labour constraints, claims Knight Frank Singapore. According to a research record posted by the firm in April, prime retail rents in Orchard averaged at $31.20 psf per month (pm) last quarter, inching up just 0.4% q-o-q.
The fast entries and exits of F&B brands can point to an indicator of over growing and the demand for intervention to stabilise the marketplace, says Knight Frank. “The dining scene seems reaching oversupplied values, and gauges to cool down the market for a sustainable market may be required sooner instead of later on,” says Ethan Hsu, head of retail at Knight Frank Singapore.
Pointing out information from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notices that a total amount of 3,047 F&B businesses shut down in 2024– the top number ever since 2005. On the other hand, 3,793 F&B businesses were developed the same year, the second-highest number since 3,934 beginnings in 2021.
Provided the persistent high-cost setting and the significantly affordable F&B scene, the outlook for the retail remains challenging, says Knight Frank. Additionally, sweeping tariffs announced by United States Head of state Donald Trump can pull down business sentiment. “For a small trading country like Singapore, this may have far-ranging results that could undermine [Knight Frank’s] delicate 1% to 3% growth projection of prime retail leas in 2025,” says Hsu.
Prime retail areas in the Marina Centre, City Hall and Bugis places averaged at $26.40 psf pm in 1Q2025, up 0.6%, while city-fringe prime retail rents dropped 0.3% q-o-q to $24 psf pm. Suburban prime retail leas evened out $26.80 psf pm, up 0.3% q-o-q.
The largely inactive rents follow mixed retail sales performance in 1Q2024. While data from the Singapore Department of Statistics showed retail sales leaving out car reviving from a year-end downturn to hit $4 billion in January on the back of Chinese New Year events, it subsequently tumbled to $3.2 billion in February before climbing back up to $4.2 billion in March.
