URA report shows retail vacancy rate rose to highest level in past decade

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Data from the Urban Redevelopment Authority (URA) published on Friday (28 October) showed that in the third quarter, Singapore mall vacancies rate rose to the highest level in a decade as an oversupply of shop spaces added to muted spending by shoppers.

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According to the research, mall vacancies rose 0.6 percent to 8.4 percent in the three months ended 30 September, even as rents declined 1.5 percent in the quarter, highest vacancy rate since September 2006, according to data compiled by Bloomberg.

According to an e-mailed statement, URA started to include food and beverage, entertainment and fitness outlets to its retail space data in 2011, which it backdated to the first quarter of 2011. Prior to 2011, the statistics only included shop space.

 URA also stated that the demand for shopping space is being dented as consumers rein in spending amid slowing growth and buyers increasingly turn to shopping online, which is converging with a rising supply of mall space, which threatens to further squeeze rents.
However, despite the market demand on retail spaces, Singapore will add almost 4 million square feet of retail space over the next three years, according to data from Cushman & Wakefield.

URA's report said that office landlords are also struggling to maintain rents amid rising supply. Office vacancies rose to the highest in more than four years despite rents sliding 1.1 percent in the quarter. Prices of office space decreased 0.4 percent in the quarter compared with a 1.5 percent decline in the previous three months.

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