Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
Prime retail areas in the Marina Centre, City Hall and Bugis spots equated 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 rents evened out $26.80 psf pm, up 0.3% q-o-q.
Singapore prime retail rents remained mostly condo in 1Q2025 amid a retail setting that remains to face rising operating costs and labor restrictions, says Knight Frank Singapore. According to a research record posted by the business 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.
Citing data from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notes that a total of 3,047 F&B businesses shut down in 2024– the top figure since 2005. On the other hand, 3,793 F&B businesses were developed the similar year, the second-highest figure ever since 3,934 starts in 2021.
The commonly inactive rents comply with blended retail sales performance in 1Q2024. While data from the Singapore Department of Statistics showed retail sales omitting motor vehicles reviving from a year-end slump to hit $4 billion in January on the back of Chinese New Year events, it ultimately fell to $3.2 billion in February before moving back up to $4.2 billion in March.
Given the consistent high-cost setting and the significantly affordable F&B scene, the outlook for the retail stays challenging, says Knight Frank. Furthermore, sweeping tariffs revealed by United States President Donald Trump could pull down business position. “For a small trading country like Singapore, this could have far-ranging results that can weaken [Knight Frank’s] delicate 1% to 3% development foresight of prime retail rents in 2025,” says Hsu.
The rapid entries and exits of F&B brands can point to an indication of over growing and the demand for intervention to stabilise the marketplace, claims Knight Frank. “The dining scene appears to be getting to oversupplied values, and determines to cool the market for a lasting sector might be needed earlier rather than later,” states Ethan Hsu, head of retail at Knight Frank Singapore.
Potential steps consist of restricting the amount of F&B permits issued within a particular area, capping the percentage of net lettable location designated for F&B in a mall to a stakeholder-reviewed proportion, or imposing a tax obligation on F&B chains that broaden past a certain range of avenues within a designated period. “These can all act as a call for F&B operators not to bite off more than they can eat and expand the development of F&B to an extra reasonable and sustainable pace,” adds Hsu.
Together, the F&B setting has observed an increased pace of dining establishments setting up and shutting down, adds the Knight Frank statement. In 1Q2025, F&B brands including Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their shops, while hotpot chain Haidilao shut 2 sites.
