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News Release


Jones Lang LaSalle Retail Market Pulse: Islandwide Rents Stabilise as Orchard Goes into Revamp Mode

​SINGAPORE, 26 September 2012 – Orchard prime retail rents continued to moderate to $37.66 psf pm in 3Q12, albeit at a slower pace, dragged by weaker retail sales and visitor arrivals. According to Singstat, retail sales experienced a dip of 0.7% y-o-y in July, led by declines in the key segments of watches and jewellery and departmental stores. Likewise, visitor arrivals recorded a second consecutive m-o-m decline (-4.6%) in May, reflecting a further weakening of global consumer sentiments. A further slide in rents was mitigated by healthy leasing activity among the Food and Beverage (F&B) operators and new-to-market such as H&M, Abercrombie & Fitch, Tory Burch and Anne Fontaine over the recent months. 

Some of these leading brands have also made their foray into the suburban market and domestic consumer demand has remained relatively stable as evidenced by the rental trend. Suburban prime rents remained the most resilient at $28.20 psf pm since 3Q11. The emergence of new-to-market brands such as H&M, Uniqlo and Robinsons in the sub-regional centres - where there is a high captive office and residential market, has supported this rental trend.
Hannah Macdonald, Head of Retail at Jones Lang LaSalle noted, “As the population matures and demands for greater product variety increases, the Suburban sub-market is poised for a stunning transformation with the additional stock coming over the next 4 years. Retailers will also be able to tap into the spending power of the decentralised workforce when the global economy recovers from the current uncertainty.” 

Faced with rising competition, Orchard retail is in the midst of a revamp as major players including Wisma Atria and Plaza Singapura embarked on successful asset enhancement initiatives (AEIs). This has since kick started a flurry of AEIs among other malls such as The Heeren, Shaw Centre and Pacific Plaza in a bid to adapt to the changing consumer trend.
At the same time, URA has taken the opportunity to “re-launch” its own improvement plans for a better connected Orchard Road through the underground Masterplan. If successfully implemented, this underground blueprint could result in an expansion of the retail area to the west of Orchard Road in the future. Largely occupied by older malls such as Forum shopping mall, Far East Shopping Centre and Palais Renaissance, the provision of these underground linkways could motivate these underperforming malls to refresh themselves through asset enhancement works, attracting this potential ‘increase’ in foot traffic. 

Even as the Orchard retail area undergoes this transition phase to take shopping experiences to the next level, the underlying fundamentals of the country’s economic performance will still have a heavy bearing on the consumer sentiment. Dr Chua Yang Liang, Head of Research for Southeast Asia at Jones Lang LaSalle noted, “The recent announcement of the QE3, improvements in the US market together with the stronger consumer demand from the regional economies of Indonesia and the Philippines, this could shore up consumer confidence and spending as we enter the year end festivities. In the longer term, we could see an improvement in rents by the 2H13 when global economic weather is expected to brighten then.”

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Explanatory Notes:
- Prime retail rents refers to the average of prime level rents

Notes to editors
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.2 billion of assets under management.

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 22,200 employees operating in 79 offices in 14 countries across the region. The firm was named ‘Best Property Consultancy’ in nine Asia Pacific countries at the International Property Awards Asia Pacific 2012, in association with HSBC, and was highly commended in a further three countries. For further information, please visit, 200 East Randolph Drive Chicago Illinois 60601 │ 22 Hanover Square London W1A 2BN │ 9 Raffles Place #39–00 Republic Plaza Singapore 048619