Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
Prime retail areas in the Marina Centre, City Hall and Bugis places averaged at $26.40 psf pm in 1Q2025, up 0.6%, whilst city-fringe prime retail rents dropped 0.3% q-o-q to $24 psf pm. Suburban prime retail leas averaged $26.80 psf pm, up 0.3% q-o-q.
At the same time, the F&B scene has seen a sped up speed of restaurants setting up and closing, adds in the Knight Frank information. In 1Q2025, F&B labels consisting of Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their stores, whilst hotpot chain Haidilao shut 2 outlets.
The largely stale leas follow blended retail sales productivity in 1Q2024. Whilst information from the Singapore Department of Statistics revealed retail sales leaving out motor vehicles rebounding from a year-end downturn to strike $4 billion in January on the back of Chinese New Year celebrations, it subsequently tumbled to $3.2 billion in February prior to moving back up to $4.2 billion in March.
Mentioning data from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notes that a total amount of 3,047 F&B businesses shut down in 2024– the biggest figure ever since 2005. On the other hand, 3,793 F&B businesses were formed the similar year, the second-highest figure since 3,934 beginnings in 2021.
The swift entries and exits of F&B brands could indicate a sign of over growing and the demand for intervention to secure the market, claims Knight Frank. “The dining scene appears to be getting to oversupplied levels, and gauges to cool the marketplace for a sustainable industry might be required sooner instead of later,” states Ethan Hsu, head of retail at Knight Frank Singapore.
Provided the relentless high-cost environment and the considerably competitive F&B scene, the outlook for the retail stays difficult, says Knight Frank. Furthermore, sweeping tariffs announced by United States President Donald Trump could pull down business view. “For a smaller trading nation like Singapore, this might have far-reaching impacts that could weaken [Knight Frank’s] delicate 1% to 3% progress projection of prime retail leas in 2025,” says Hsu.
Possible actions consist of restricting the number of F&B licences released within a certain location, capping the proportion of net lettable area designated for F&B in a mall to a stakeholder-reviewed ratio, or enforcing a tax obligation on F&B chains that increase past a particular number of avenues within a designated period. “These can all work as a call for F&B operators not to bite off more than they can chew and spread out the growth of F&B to an extra reasonable and sustainable pace,” adds Hsu.
Singapore prime retail leas stayed mainly condo in 1Q2025 amid a retail setting that continues to deal with rising operating costs and labour restraints, claims Knight Frank Singapore. According to a research report released by the business in April, prime retail leas in Orchard equated at $31.20 psf per month (pm) past quarter, inching up just 0.4% q-o-q.
