A property market report released by commercial real estate firm JLL reflected a slowdown in retail sales growth in Singapore as inflation prompted consumers to exercise caution.
Tourist arrivals into Singapore, however, showed continued growth, with 5.2 million arrivals between January and May 2023.
Below, a look at the factors impacting Singapore’s retail landscape in 2023.
Rents are projected to increase in 2023
The retail sales index, excluding motor vehicles, in chained volume terms increased by 1.6 percent year-on-year over the first two months of the second half of the year, compared to 2.5 percent year-on-year in the first half of 2023.
While Singapore’s stable reputation continues to help set the stage for new ventures, it is the domestic market’s resilience as well as sustained growth in international tourism that are expected to drive business expansion.
With a falling vacancy rate outlook, rents for retail spaces are projected to increase in 2023.
Landlords look to experiential retail to boost footfall
To remain relevant and attract shoppers in the post-Covid era of e-commerce, landlords are incorporating current and new activity-based retailers into their tenant mix, according to Cushman & Wakefield.
Entertainment and education retailers are in demand for large vacant retail units, with Timezone, Kiztopia Club, and NK Robotics expanding their offerings.
Premier mall Ion Orchard, for example, mounted a spring-summer campaign with a garden and waterfall installation headlined by an eight-minute light show planned for five weekends over the season.
Cinemas are also reinventing their concepts to compete with streaming platforms, such as Golden Village’s collaboration with The Projector (GVxTP) to hold performances and events besides film screenings.
F&B the dominant driver of store openings
Amid an vibrant dining landscape, majority of store openings in Singapore are being driven by new and existing F&B brands, including Luckin Coffee, Bulgogi Syo, BHC Chicken, and Tonkatsu Enbiton.
Ion Orchard recently added Surrey Hills Grocer, Puzzle Coffee, and Le Matin Patisserie to its tenant mix, while The Shoppes at Marina Bay Sands welcomed % Arabica, Bacha Coffee, PS Café, and the debut of Ralph’s Coffee in Singapore.
Also coming to Singapore’s COMO Orchard in the fourth quarter of 2023 is the first international outpost of the Michelin-starred Korean steakhouse, Cote.
F&B is estimated to make up 46 percent of store openings at prime malls this year, according to data as of May 2023.