Colliers International’s research shows that average retail rents declined 2.4% in the first half of 2021 in Singapore
- Average retail rents declined 2.4% in H1 2021 in Singapore.
- Islandwide net absorption turned positive in H1 2021 from -280,000 sq ft in H2 2020.
- Average retail rents to decline 1.8% in 2021 as higher vaccination rates may allow for a potential easing of restrictions towards the end of the year.
- Ground-floor rents on Orchard Road declined 2.7% HOH in H1 2021 to SGD36.24 per sq foot, while that of Regional Centres only declined 2.0% HOH to SGD31.05 per sq foot.
- Total retail transaction volumes declined 78.3% HOH to SGD564 million.
Colliers International on 11 August published its research reports which examine the market performance of the retail property sector in the first half of 2021 (H1 2021) and its projections for the industry.
Based on Colliers’ Research, average retail rents declined 2.4% in H1 2021 overall despite net absorption turning positive from -280,000sq ft as landlords prioritised occupancy over rents.
“We can expect average retail rents’ to decline 1.8% in 2021 as higher vaccination rates could allow for a potential easing of restrictions towards the end of the year”, said Ms June Chua, Collier International’s Executive Director, Head of Tenant Representation, said.
“Overall, we can also expect a positive net absorption in 2021 as the economy recovers while supply remains muted.”
Colliers’ Research’s data shows that ground-floor rents on Orchard Road declined 2.7% HOH in H1 2021 to SGD36.24 per sq foot, while that of Regional Centres only declined 2.0% HOH to SGD31.05 per sq foot, impacted by the Phase 2 (Heightened Alert) tighter restrictions of prohibited dine-in, and lower mall occupancy limits and permissible group size.
Meanwhile, the crisis has accelerated the ongoing recalibration of the retail industry. “With the exit of several unsuccessful brands, opportunities were created for new brands to enter the market via concept and flagship, as part of their omnichannel distribution network. Meanwhile, landlords are pushed to reconsider their tenant optimisation, asset repositioning and placemaking strategies in response to changes in the retail industry,” said Jonathan Denis-Jacob, Director, Head of Advisory & Consulting at Colliers.
“Some great examples are Honey’s Bar opening its first store in Jurong Point, BTS pop-up store launching at Funan after its earlier success at Plaza Singapura, Flash Coffee expanding its operations in Asia by adding 300 new outlets by the end of 2021, and jewellery group Malabar targeting to open 16 overseas outlets including Singapore by Q1 2022. Further, The Shoppes at Marina Bay Sands, which has welcomed about 20 new stores since June 2020, saw its occupancy recovering to 99% in Q1 2021.”
That said, total retail transaction volumes declined 78.3% HOH to SGD564 million from a high base due to Frasers Centrepoint Trust (FCT) ‘s purchase in H2 2020 of the remaining 63.1% stake in the Asia Retail Fund, which owns five suburban retail malls in Singapore as part of its portfolio.
Mr Steven Tan, Colliers International’s Executive Director of Investment Services at Colliers, commented: “There were a few notable deals in H1 2021, including the divestment of YewTee Point by Frasers Centrepoint Trust, and Low Keng Huat’s acquisition of a 45% stake in Paya Lebar Square in a stake swap deal with Sun Venture.”
Mr Paul Ho, chief officer at iCompareLoan, said: “Going forward, I expect the average retail rents to stabilise. It is a good time for investors to calculate if they can afford to buy such properties.”
A loan calculator will equip you to walk into a mortgage with accurate information, affording you peace of mind as you will know exactly how much you can afford to spend each month. This will also help you to better budget other household bills, such as groceries, credit card expenses, taxes and the like.
A mortgage calculator’s ability to compare lenders rates is another added advantage as it means that you always have a price comparison tool at hand, where you can quickly compare various mortgage products at the touch of your fingertips, from the comfort of your home. This will enable you to easily calculate which lender best suits your needs and quickly compute how much you can save monthly and annually between various loan products.
Estimating loan size can be made simpler when you know the difference between various loan products.
It may seem minute when you only see the percentage difference but a loan calculator will help you clearly see how even a 0.15 per cent difference between loan products can save you thousands of dollars.
Take for example a mortgage of $500,000 from one lender over a period of 25 years, with an interest rate of 2 per cent. This will amount to a $2,119.27 repayment each month. In just a few easy steps, a mortgage calculator can help you find another, more affordable product, such as a mortgage with the same terms with a slightly lower interest rate of 1.85 per cent. This would constitute a monthly repayment of $2,082.95.
Although a saving of $36.32 per month may seem small to some, this saving translates to a sizable $435.84 per year and a savings of $10,896 throughout the entire 25-year mortgage period. A few simple clicks on the mortgage calculator has now enabled the buyer to save thousands of their precious money – money that could go towards major life expenses or even a well-deserved vacation!
Besides this, some mortgage calculators can help increased insight as they could provide you, the property buyer, with the ability to calculate the differences between principle and interest only mortgages and repayment numbers. With the help of such features, you can rest easier, only bearing in mind that there will be a final balance to pay at the end of your term if you opt for principle and interest only payments.
What the loan calculator lacks in estimating loan size is the human touch. The loan calculator will not be able to tell you which will be the best home loan for you. It will not be able to tell you when you need to refinance your mortgage, the terms of change when you refinance, or if you choose to switch lenders midway as your loan term progresses.
This is where a mortgage broker will be vital in helping you navigate changes to your loan and mortgage. A mortgage broker will take the information the mortgage calculator has provided you to offer multiple mortgage options that are uniquely suited to you and your needs. A good mortgage broker will also take time out to explain what each of these options mean for you.
It can be overwhelming for a layperson to try to make sense of the housing market, given that it is chock full of technical terms and jargon. Even with the help of a mortgage calculator most home buyers will not only know the industry and the products within the industry well. A mortgage broker however will be able to explain these nuances to you in an accurate way that is easy to understand.
The post Average retail rents declined 2.4% in first half of 2021 appeared first on iCompareLoan.
