2025-07-21-莱坊-Singapore_Retail_Market_Update_Q2_2025页_510kb

Singapore Retail Market Q2 2025

Key Findings

• Prime Retail Rents: Prime retail rental rates continued to increase moderately, reaching S$28.20 psf pm, a 1.2% quarter-on-quarter rise and a 3.0% year-on-year increase, despite economic uncertainties.
• Visitor Arrivals & Consumption: Tourism arrivals moderated slightly compared to previous months but remained strong compared to pre-pandemic levels. However, overall F&B operating expenditure (S$12.3 billion in 2023) increased to a record high, putting pressure on operators due to rising costs.
• Retail Sales: Retail sales performance showed slight month-on-month moderation at S$3.6 billion in May, but the year-to-date figure (S$9.0 billion) is the second-highest on record, indicating overall market resilience.

Market Challenges

• Shrinking Margins & Sustained Costs: Operators face shrinking margins and are experiencing cash burn due to a combination of rising operating costs, labour shortages, intense competition, and the difficulty of achieving rapid sales recovery in the current environment.
• Strain on Lifestyle Precincts: Established "lifestyle" areas like Holland Village, previously defined by distinct identity, are facing challenges from boarded-up shops and losing established tenants, risking a loss of unique character unless active placemaking and strategic planning are maintained. Successful examples like Joo Chiat and Katong show how heritage appeal can be preserved.

Exceptions & Positive Notes

• Affordable Formats & Experiences: Smaller F&B tenancies (cafés, food kiosks) continue to perform relatively well, aided by a lack of intense competition and a focus on affordability. Operators are surviving by adapting and resisting the homogenization of retail experiences.
• Brand Consolidation & New Entries: Despite uncertainties, some well-established brands (like Legendary Hong Kong, Mak Man Kee Wonton Noodles, Swee Heng Toast & Roll) continue to open new outlets, while Singapore maintains a significant position (third largest share globally) for luxury store openings due to stability, rising affluence, and attracting HNWIs.
• Placemaking & Landlord Focus: Landlords and operators are increasingly recognizing the need to prioritize placemaking, unique identities, community heritage, and long-term tenant health over short-term rent maximization.

Outlook

• Challenging Outlook: The immediate retail forecast for the next two quarters looks challenging, as amplified by heightened US protectionism and ongoing global uncertainty, which are weighing on turnover and occupier confidence. Consumer spending is subject to caution as businesses adopt a more defensive stance.
• Resilience Tested: The sector's ability to adapt, balance opportunity with caution, and demonstrate resilience in the face of opposing factors (increasingly uncertain global conditions, persisting operational pressures) will be critical in navigating the upcoming period.

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