Recent news of Amazon Prime’s entry into Singapore may have consumers excited but retailers here will have to find a way around the possibility of declining sales. And should a decline occur, there could also be a trickle-down effect on the retail property scene.
On the upside, heartland malls might be scoring better than those in the city centre. Suburban malls have received demand for 15,000 sq m in H1 alone, a promising sign when supply of new space was only 13,000 sq m. Local brick-and-mortar shops and malls are expected to fare better despite the entry of the major e-commerce operator.
The decline of office rents however have been slowing, with a 1.1% decline on Q2 following a 3.4% fall in Q1. Prices of office units have also slowed, from a 1.4% fall in Q2 following a 4% dip in Q1. Vacancy rates may show a 12.4% increase however, due to the 76,000 sq m new office space stock in the second quarter.
Property analysts are happy with this decreasing rate of decline, viewing it as a turning point for the office market. Premium office spaces such as those in Marina Bay are expected to lead the way in price recovery.