Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
Singapore prime retail rentals stayed greatly condo in 1Q2025 amid a retail setting that continues to face ascending operating expense and labor restrictions, claims Knight Frank Singapore. According to a research record published 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 might indicate an indication of overgrowth and the demand for intervention to stabilise the marketplace, claims Knight Frank. “The dining scene appears to be getting to oversupplied levels, and measures to cool the marketplace for a lasting field may be needed earlier as opposed to later on,” states Ethan Hsu, head of retail at Knight Frank Singapore.
Offered the persistent high-cost atmosphere and the considerably affordable F&B scene, the outlook for the retail remains tough, says Knight Frank. Additionally, sweeping tariffs introduced by US President Donald Trump can drag down business position. “For a smaller trading country like Singapore, this may have far-ranging impacts that can undermine [Knight Frank’s] delicate 1% to 3% development forecast of prime retail rental fees in 2025,” claims Hsu.
Prime retail areas in the Marina Centre, City Hall and Bugis areas averaged at $26.40 psf pm in 1Q2025, up 0.6%, whilst city-fringe prime retail rents fell 0.3% q-o-q to $24 psf pm. Suburban prime retail rents evened out $26.80 psf pm, up 0.3% q-o-q.
Prospective actions consist of limiting the number of F&B permits provided within a particular place, capping the percentage of net lettable area allocated for F&B in a mall to a stakeholder-reviewed proportion, or enforcing a tax obligation on F&B chains that increase beyond a specific range of outlets within a designated period. “These can all work as a call for F&B drivers not to bite off more than they can eat and spread out the growth of F&B to a much more fair and sustainable pace,” adds Hsu.
Together, the F&B setting has viewed an increased pace of eateries setting up and closing, adds the Knight Frank report. In 1Q2025, F&B brand names consisting of Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their shops, whilst hotpot chain Haidilao shut 2 shops.
The largely stale leas adhere to mixed retail sales productivity in 1Q2024. While data from the Singapore Department of Statistics revealed retail sales excluding car reviving from a year-end depression to hit $4 billion in January on the back of Chinese New Year events, it consequently slipped to $3.2 billion in February prior to rising back up to $4.2 billion in March.
Pointing out information from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notices that a total amount of 3,047 F&B businesses shut down in 2024– the top figure since 2005. On the other hand, 3,793 F&B businesses were created the same year, the second-highest number since 3,934 beginnings in 2021.
