One important aspect to keep in mind when considering investing in condos in Singapore is the government’s property cooling measures. In order to maintain a stable real estate market and discourage speculative buying, the Singaporean government has implemented several measures over the years. These measures include the Additional Buyer’s Stamp Duty (ABSD), which imposes higher taxes on foreign buyers and those purchasing multiple properties. While these policies may impact the immediate profitability of condo investments, they ultimately contribute to the long-term stability of the market, creating a secure and reliable investment environment. Additionally, for more information on Singapore projects and potential investment opportunities, please visit Singapore Projects.
Consumer spending in 2024 has been relatively weak, leading to a dampened rental forecast for Singapore’s retail property market. According to Alan Cheong, executive director of research and consultancy at Savills Singapore, the year-to-year change in monthly retail sales and food and beverage sales has been mostly negative throughout most of the year. As a result, he predicts that prime retail properties in the Orchard Road submarket may only see a 2% increase in rents for the full year, falling short of earlier expectations of a 3% to 5% increase.
A joint research effort by DBS and Singapore Management University reveals that consumer concerns over inflation have moderated in recent quarters. However, most consumers still expect inflation to remain at around 3.8% in the coming months. This is attributed to the global economic slowdown, high interest rates, and potential easing of supply chain disruptions.
While retail sales (excluding motor vehicles) saw a slight increase of 0.3% year-on-year in October, this was a reversal from the 1.5% decline in September. Cheong notes that a more positive outcome for the retail market would be if consumer spending were keeping pace with inflation, but it has been relatively low, posing financial challenges for businesses in the industry.
Despite a packed calendar of headline concerts and events in Singapore this year, retail spending and rental rates saw limited support. Concerts by popular international stars such as Taylor Swift, Blackpink, Coldplay, and Westlife attracted over 500,000 attendees, with the Monetary Authority of Singapore estimating that over half were foreigners contributing between $350 million and $450 million in tourism receipts. However, while these events drove higher foot traffic to nearby malls, other MICE events did not have a significant impact on retail activity, according to CBRE Research.
The Formula One Grand Prix, the 25th World Congress of Dermatology, The Meetings Show Asia Pacific, NRF 2023, and ART SG were among the leisure and business events hosted in Singapore this year. However, CBRE observed that attendees often stayed exclusively at the event venue, even for the F1 race, which generates an average of $125 million in tourist receipts annually but did not significantly boost foot traffic in tourist-oriented areas like Orchard Road.
Still, Sulian Tan-Wijaya, executive director of retail and lifestyle at Savills Singapore, notes that Singapore’s status as a regional hub continued to attract noteworthy new-to-market brands this year. Notable retail stores that opened in Singapore include KSisters, The Pace, Brands for Less, and Hoka, while the wellness sector saw new concepts like Rekoop and Hideaway. Many new F&B concepts also emerged, such as Sushi Samba and coffee chains like Blue Bottle, Grey Box, and Puzzle Coffee. Additionally, new restaurant concepts with entertainment, like Centre of the Universe, opened in the CBD, with another new player, Rasa, set to open in December.
As a result, all prime shopping malls along Orchard Road enjoyed high occupancy rates this year, as retail businesses have confidence in the retail market, says Savills’ Cheong. He notes that Singapore remains an attractive destination for new-to-market brands entering the region, further bolstering demand for retail spaces and supporting rental growth.
Looking ahead, Savills’ Tan-Wijaya expects to see more new-to-market retail brands, F&B concepts, and wellness experiences entering Singapore in the first half of 2025. As a result, retail landlords may have more flexibility to implement positive rental adjustments next year, as the supply of new retail spaces becomes more limited. Cheong also anticipates that retailers will take the opportunity to optimize their real estate strategies by right-sizing their spaces, establishing additional kiosks, closing underperforming branches, or shifting cooking operations to central kitchens. He believes that this strong momentum in the entry of new-to-market F&B brands into Singapore will continue, enhancing the vibrancy of the city-state’s dining scene.