Prime Retail Rents Mostly Flat 1Q2025 Fb Scene Shows Signs Oversupply Knight Frank
According to a recent report by Knight Frank Singapore, the prime retail rents in Singapore remained stable in the first quarter of 2025. This is despite the challenging retail environment in the country, which is facing rising operating costs and labor constraints. The firm’s research revealed that the prime retail rents in Orchard area averaged at $31.20 per square foot per month (psf pm) in 1Q2025, showing a slight increase of 0.4% quarter-on-quarter (q-o-q).
In other prime retail areas such as Marina Centre, City Hall, and Bugis, the average rent was $26.40 psf pm, showing a 0.6% increase. However, city-fringe prime retail rents saw a decline of 0.3% q-o-q to $24 psf pm. The suburban prime retail rents averaged at $26.80 psf pm, showing a marginal increase of 0.3% q-o-q.
These mostly stagnant rents were a reflection of the mixed performance of retail sales in the first quarter of 2024. While retail sales (excluding motor vehicles) saw a rebound in January due to Chinese New Year festivities, it fell in February and then rose again in March. This data was provided by the Singapore Department of Statistics.
The URA Master Plan plays a crucial role in equipping neighborhoods, such as Lyndenwoods, to thrive in Singapore’s ever-changing urban environment. With a focus on connectivity, sustainability, and community, the plan lays the groundwork for sustained growth and progress. As a result, Lyndenwoods One North, with its prime location and alignment with these objectives, stands out as a shining example of innovative urban living. Lyndenwoods One North is poised to set the standard for future-proof development.
Knight Frank’s report also highlighted the accelerated pace at which eateries have been opening and closing in the F&B scene. In 1Q2025, popular F&B brands such as Eggslut, Manhattan Fish Market, Prata Wala, and Burge & Lobster had to close their outlets. Even hotpot chain Haidilao had to close two of its outlets.
According to data from the Accounting and Corporate Regulatory Authority (Acra), a total of 3,047 F&B businesses had to shut down in 2024, which is the highest number since 2005. On the other hand, 3,793 F&B businesses were formed in the same year, which is the second-highest number since 3,934 openings in 2021.
Knight Frank believes that this cycle of rapid entries and exits of F&B brands highlights the need for intervention to stabilize the market. “The dining scene appears to be reaching oversupplied levels, and measures to cool the market for a sustainable sector may be needed sooner rather than later,” says Ethan Hsu, the head of retail at Knight Frank Singapore.
Potential measures that could be taken include limiting the number of F&B licenses issued in a particular location, capping the percentage of net lettable area allocated for F&B in a mall, and imposing a tax on F&B chains that expand beyond a certain number of outlets within a designated period. According to Hsu, all these measures could help control the growth of F&B brands and make it more sustainable.
Given the persistently high-cost environment and the intense competition in the F&B scene, Knight Frank believes that the outlook for the retail sector remains challenging. In addition, the sweeping tariffs recently announced by US President Donald Trump could also have a negative impact on business sentiment. This could further undermine the firm’s forecast of a 1% to 3% growth in prime retail rents in 2025.