Retail sector growth slows: Savills
by Cheryl Tay
The Christmas season has brought little joy to retailers as they face lacklustre sales, according to the Q4 2012 Retail Briefing by Savills Research.
Excluding motor vehicles, retail sales posted a growth of 1.3 percent. However, year-on-year growth slowed to -0.6 percent (4.1 percent since April 2012). At the same time, sales of jewellery and watches — a measure of discretionary spending — fell for six straight months in October.
Retailers were also generally cautious in expanding their stores in H2 2012, with several looking to consolidate their operations. Nevertheless, existing retailers and new entrants who increased their presence were offered space with attractive rents and strategic locations.
Stores that expanded include famous brands such as Uniqlo, Toys"R"Us, Sephora, Lowrys Farm, Isetan and H&M. The latter opened its second store in ION Orchard, while Babies"R"Us and Toys"R"Us opened two adjacent stores in City Square Mall (pictured), with a combined area of 25,000 sq ft.
In addition, two malls — Chinatown Point and Plaza Singapura's new wing — opened in November. Formerly known as The Atrium@Orchard, the new wing increased Plaza Singapura's net leasable area to 629,000 sq ft from 498,150 sq ft.
Average prime rents on Orchard Road slid to S$35.1 psf pm in Q4 from S$35.2 in the previous quarter, while rents in prime suburban areas remained at S$31.1 psf pm.
"In the absence of extreme shocks, such as the 2009 supply onslaught of nearly 1.3 million sq ft on Orchard Road and negative GDP growth, we expect just a mild rental correction of up to three percent in the main shopping belt," said Alan Cheong, Director at Savills Research Singapore.Cheryl Tay, Editor of CommericalGuru, wrote this story. To contact her about this or other stories, email cheryltay@allproperty.com.sg
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