Singaporeans are flocking overseas to seek revenge, and the Singapore dollar’s strength is encouraging this. However, tourists who visit will have limited purchasing power.

Renter sales in Tier-1 malls are now higher than before Covid, due to the recovery of tourism and revenge-buying. The landlords’ expectations of rental income are on the rise, along with property operating costs.

Retail sales increased from February until September 2023 for eight straight months before declining in October. The Department of Statistics reported that retail sales rose in November to S$4.1billion.

Food and beverage was the main driver for new openings in prime malls, accounting for 48 per cent. Then came fashion, beauty and wellbeing, and lifestyle.

Singapore’s international visitors arrived in 1.1 million for the fourth month running, which was still more than the 816.340 that were there in November of 2022. Prior to the pandemic in November 2019, 1.5 million tourists arrived.

Analysts predict that Orchard Road rental prices will rise as a result of the tourist spending, but there are downside risks.

Tourism is expected to fully recover by 2024. However, rising fuel prices and inflation could cause transport and lodging costs to increase for tourists.

With the macroeconomic situation weakening, travelers may be forced to tighten up their purse strings. They might also become more conservative with their spending plans.

Singapore’s retail landlords will see their rents rise in 2023 after a period of pandemic declines.

Analysts think that the plans to revive Orchard Road to become a lifestyle destination would help boost rents and price in the long run.

Orchard Road has seen an increase in interest. Tanglin Shopping Centre will be sold in 2022 at S$868 Million, and Far East Shopping Centre for S$908 Million. Scotts Square was also put up for auction at S$450million.

Check out: Lentor Mansion condo

The redevelopment and renovation of older buildings along Orchard Road will bring about more retail space, which could attract new tenants. This could result in higher rents and a transformation of the area into a vibrant and prominent area with more foot traffic.

Pasir ris mall with an estimated 280,000 sq ft NLA is one of the major developments that will be completed by 2024. Labrador Tower is also constructing a smaller retail component of about 30,000 square feet NLA.

Rents should be supported by the addition of retail space in 2024, as it is below the historic five-year average of 0.62m sq ft.

The capital value of the market is also expected to increase in 2024, according to her.

URA data indicates that retail prices in the Central Region rose by 0.9% since Q1’s low. In Q3, the index of prices was 26% below its peak in Q4 2014.

Owners who run their own retail concept or F&B as well those who simply lease their units out based on rental rates are responsible for the mishmash.

In the post-pandemic environment, these malls could benefit from a redesign with regard to mall positioning and trade mix strategy to provide an holistic shopper’s experience and appeal a new customer generation.

Orchard Road is expected to see an average annual rent increase of 3 to 5% by 2024.

In the suburbs, rents are expected to remain flat, as outbound travel, inflation, and discretionary spending dampen the demand for housing.

URA data estimates that 570,000 square feet of net lettable space (NLA) will be added to retail in 2024.

The 1.2 million square feet of NLA completed last year is still higher. This is a figure that is similar to the 599.549 sq. ft. NLA completed for 2021 and is slightly higher than 443,473 sq. ft.

In 2024, there is a low probability of an oversupply at retail and this will not impact retail rents in 2019.

According to market watchers, while the inflationary pressures and higher Goods and Services Tax will have an immediate impact, they won’t dampen spending on retail goods and services or push down rents.

Rents for prime retail properties are projected to increase between 1.5 and 4.1% in 2023. This will be driven by the Orchard Road, and Downtown submarkets.

Inflation and increased demand are driving up retail rents. This is especially true for Tier-1 malls, such as Ion Orchard, Nex, and Ion Orchard.

Retailers have been hit hard by the impact of inflation and the GST hike.