Singapore has climbed up one spot in the latest survey conducted by CB Richard Ellis for the world’s most expensive retail locations.
CBRE’s Global MarketView report on the retail sector showed that prime retail rents in the country ranked 17th worldwide as the most expensive location during the first quarter of this year, up from 18th spot in the fourth quarter last year.
According to the report, the average prime retail rent in the country at end-Q1 was US$436 psf per year, down from US$444 psf at the end of last year.
“Singapore has been successful in attracting a sizeable number of global brands and new-to-market concepts due to an abundant choice of prime pipeline supply in the Orchard Road and the Marina Bay areas. That in turn has put some pressure on prime retail rents,” said Letty Lee, director of retail services at CBRE Singapore.
New York, Sydney, Hong Kong, London and Paris kept their positions as the top five most expensive retail markets in the world.
Despite insufficient retail sale growth in most markets, prime retail rents in most of the world’s leading shopping destinations have stabilized and even improved in some major cities during the first quarter.
“Retailers still face uncertain trading conditions and continue to put pressure on landlords to offer incentive packages,” said Ray Torto, global chief economist of CBRE.
“However, market pressures have not stopped retailers from expanding, and demand for prime retail space remains strong in many markets,” he added.
While most of the prime office space appears to be in demand, secondary units around the world are typically experiencing falling rents, lower retailer demand and higher vacancy rates, CBRE said.
Peter Gold, the group’s head of cross-border retail for Middle East, Europe and Africa, said it is too early to predict that the gap will narrow during this year.
Among all regions, Asia seems to appear to be leading in the recovery, with retail markets generally strengthening in the first quarter.
“Thus far, Asia is the only region of the world where economic growth is starting to feed through into retail sales increases, and this is now starting to impact real estate markets,” said CBRE.