Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
The largely stale leas adhere to blended retail sales productivity in 1Q2024. Whilst information from the Singapore Department of Statistics presented retail sales excluding car reviving from a year-end slump to hit $4 billion in January on the back of Chinese New Year celebrations, it ultimately tumbled to $3.2 billion in February prior to moving back up to $4.2 billion in March.
Prime retail spaces in the Marina Centre, City Hall and Bugis spots equated at $26.40 psf pm in 1Q2025, up 0.6%, whilst city-fringe prime retail rents decreased 0.3% q-o-q to $24 psf pm. Suburban prime retail rents averaged $26.80 psf pm, up 0.3% q-o-q.
At the same time, the F&B situation has actually viewed an accelerated pace of restaurants setting up and closing, adds the Knight Frank information. In 1Q2025, F&B brands consisting of Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their stores, while hotpot chain Haidilao closed two sites.
Provided the relentless high-cost environment and the significantly affordable F&B scene, the outlook for the retail continues to be tough, claims Knight Frank. On top of that, sweeping tariffs introduced by US President Donald Trump might pull down business position. “For a smaller trading nation like Singapore, this may have far-ranging results that can weaken [Knight Frank’s] delicate 1% to 3% growth foresight of prime retail leas in 2025,” claims Hsu.
Mentioning information from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notices that a total of 3,047 F&B businesses closed down in 2024– the biggest number ever since 2005. On the other hand, 3,793 F&B businesses were formed the similar year, the second-highest number since 3,934 beginnings in 2021.
Singapore prime retail rents remained greatly flat in 1Q2025 amidst a retail setting that remains to deal with ascending operating costs and labor restraints, states Knight Frank Singapore. According to a research record released by the firm in April, prime retail rents in Orchard equated at $31.20 psf per month (pm) past quarter, inching up just 0.4% q-o-q.
The swift entries and exits of F&B brands could point to an indicator of over growing and the demand for intervention to secure the marketplace, says Knight Frank. “The dining scene seems getting to oversupplied amounts, and gauges to cool the marketplace for a lasting field might be required earlier rather than later,” says Ethan Hsu, head of retail at Knight Frank Singapore.
Potential actions consist of restricting the number of F&B licences issued within a specific place, capping the portion of net lettable area allocated for F&B in a mall to a stakeholder-reviewed ratio, or enforcing a tax on F&B chains that increase beyond a particular range of outlets within a designated period. “These can all work as a call for F&B drivers not to bite off greater than they can chew and expand the development of F&B to an extra reasonable and sustainable pace,” includes Hsu.
