A near-empty atrium in Suntec City on May 27, 2020. Analysts expect rents in prime malls to drop by between 10 and 14 per cent for the whole of 2020. — TODAY pic
Analysts expect rents in prime malls in areas such as Orchard Road to drop by between 10 and 14 per cent for the whole of 2020, while rents at suburban malls are projected to fall at a lower rate of around 4 to 5 per cent. According to real estate statistics from the Urban Redevelopment Authority, rental prices for retail went down by 2.3 per cent in the first quarter, while the vacancy rate increased by 0.5 percentage points and is now at 8 per cent.
“Currently, many landlords are still holding onto near pre-Covid asking rents, but as vacancies increase, landlords are expected to become more flexible,” said Ms Christine Li, the head of research for Singapore and Southeast Asia at Cushman and Wakefield, who authored the report. “Rental rates are usually contractually bound for three years, so rental erosion would take longer to claw back,” said Sim.Justin Tang, head of Asian research at United First Partners, said that the second quarter figures may just be marginally worse than the first quarter even though two months of the circuit breaker — April and May — fall squarely within that period.