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Business Times
04-07-2025
- Business
- Business Times
Higher seller's stamp duty a warning shot to speculators but unlikely to cause market distress
[SINGAPORE] Changes in seller's stamp duty will make it harder to flip a property for profit in a short time, but are unlikely to have much impact on prices or volume in Singapore's residential market, analysts said on Friday (Jul 4). Nevertheless, the timing of the move was not lost on market players, coming ahead of a third quarter season crowded with new launches. Up to 11 projects with some 5,400 units are slated to be marketed in coming weeks. The government raised rates for seller's stamp duty by four percentage points to a maximum of 16 per cent and extended the minimum holding period from three to four years, citing a sharp increase in the number of private residential transactions with short holding periods in recent years. 'In particular, there has been a significant increase in the sub-sale of units that have not been completed,' said a statement released late on Thursday night. A sale transaction is recorded as a sub-sale when a buyer who has purchased a new unit subsequently sells it to another buyer before the property is completed and the Certificate of Statutory Completion (CSC) is issued. The spike in sub-sales in the past five years was essentially due to a lag effect caused by the Covid-19 outbreak in 2020, said Leonard Tay, Knight Frank Singapore's head of research. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up From a trough of 198 sub-sales in 2020, the lowest annual tally the market has seen since 1996, the number of sub-sales has risen each year to reach a high of 1,428 by 2024, data compiled by Knight Frank showed. In particular, sub-sale volume jumped in 2023 to 1,294, a 69 per cent increase from the year before. In 2024, volume rose another 10 per cent. 'The pandemic created severe construction delays as a result of constraints in building and development resources such as labour and materials, thereby pushing back project completion dates. By the time most owners collected the keys to their new homes, three years or more had passed, and they were no longer subject to SSD,' said Tay. 'In tandem with rising private home prices, it made financial sense for those who had purchased new homes before or at the start of the pandemic to sell for significant gains to other buyers upon completion.' Sub-sale volumes hovered around 338 units per quarter between Q1 2023 and Q1 2025, compared to 131 units per quarter between Q1 2013 to Q4 2022, said Tricia Song, CBRE research head for South-east Asia. 'Some owners, who probably did not buy their projects with intention to flip, have sold their properties for significant capital gains as prices have risen 40 per cent since 2020,' Song said. The heightened interest rate environment between 2022 and 2023 before rates eased from the second half of 2024 may have also contributed to the increase in sub-sales, Tay said. 'There might be another group of buyers who had purchased uncompleted homes and were facing the start of high mortgage payments (in contrast to the low interest environment prior to 2022). In the face of such an immediate reality measured against growing economic uncertainty, some might have balked at the prospect of the higher payments and decided to sell.' Sub-sale activity has since tapered off, analysts said. Song noted that subsales as a percentage of total private residential transactions have steadily declined, from a 14-year high of 9.5 per cent in Q4 2023, to 4.4 per cent in Q1 2025. 'With property prices stabilising and normalisation of construction timelines, we expect the number of sub-sales to normalise going forward.' 'This measure should not impact the majority of buyers who are genuine owner occupiers or long-term investors,' she added. Hot projects Data compiled by The Business Times showed that between January 2019 and July 2025, the five new projects which saw the most sub-sale activity were all suburban condos in the Outside Central Region - Riverfront Residences, Affinity at Serangoon, The Florence Residences, Treasure at Tampines and The Tre Ver. At Affinity at Serangoon, 334 units were sold in sub-sales, 31.7 per cent of the 1,052 units in the project. The Tre Ver similarly saw 32 per cent of its 729 units sold in sub-sale transactions. Data crunched by head of research Nicholas Mak shows further that in the recent past, the most profitable sub-sale deals were transactions of prime properties in the Core Central Region. Between Q3 2020 and Q4 2023, the biggest winners were sellers of four Boulevard 88 units who saw capital gains of S$2.9 million to S$3.9 million, for gross profits of between 27 per cent to 38 per cent. The seller of a bungalow at Botanic @ Cluny Park, meanwhile, made S$2.6 million off their S$9 million exit prices, for a 40 per cent gross gain. The median gain of a sub-sale for sellers between 2020 and 2025 was S$257,000, Mak found. In the later period, between Q1 2024 and Q1 2025, the heftiest percentage gain was for a sub-sale at Treasure at Tampines in January 2024. The seller chalked up a gross profit of almost 50 per cent, making a capital gain of S$981,000 with their selling price of just under S$3 million. Home prices moderating While the latest increase in SSD took most by surprise, the move was not a knee-jerk reaction but a response to the prolonged increase in volume of sub-sales over several quarters, said Desmond Sim, group chief executive officer of Realion Group which was formed through the merger of OrangeTee and ETC. PropNex chief executive officer Ismail Gafoor said that the moderation of private home prices recently may temper owners' motivation to sell after a short holding period. Official flash estimates show overall private residential property prices have risen by a cumulative 1.3 per cent in the first half of 2025, down from 2.3 per cent in the year-ago period. Fresh cooling measures introduced in 2023, with steep hikes in additional buyer stamp duties (ABSD) for foreign buyers and buyers of second and subsequent properties, have also eroded possible gains from flipping properties. 'Even without this revision (in SSD), higher costs from elevated interest rates and property taxes have already eroded profits and would likely see investors holding on to their properties for longer than three years,' said Marcus Chu, CEO of ERA Singapore. Mak said: 'With more new residential launches expected in the second half of this year, the government needs a pre-emptive strike to prevent further rise in the number and proportion of sub-sale transactions.' Christine Sun, chief researcher and strategist of Realion Group, added that more condos are due to obtain their Temporary Occupation Permit. Sub-sale volume might rise in line with the anticipated increase in units securing TOP, from 5,920 units in 2025 to 6,838 units in 2026 and further to 10,306 units in 2027, she said.
Business Times
22-06-2025
- Business
- Business Times
Japan still a draw as Singapore property players look beyond Tokyo
[SINGAPORE] Japan's property market remains a firm favourite among Singapore-based property investors, who continue to deploy capital into the country despite global interest rates coming down. What has changed, however, is the type of Singapore investor making these plays and where they are looking. Rather than newcomers to the market, many of today's buyers are those who have already invested in Japan and are now looking to expand their portfolios more strategically. Melvin Chay, senior director of capital markets at Knight Frank Singapore, said: 'While we still see pockets of investors that previously never had Japan on their radar, much of the capital inflows today are follow-on investments from investors that entered the market in the last two to three years.' These investors, who are now more familiar with the Japanese market, are also venturing beyond traditional 'Tier-1' cities such as Tokyo and Osaka to areas such as Kyoto and Fukuoka – which offer higher yields of up to 5 per cent. Chay said that investors are willing to increase their risk appetites and look beyond Tokyo to combat rising interest rates and ensure returns. 'We're also seeing investors targeting opportunities with redevelopment or additions and alterations angles, signalling a willingness to go up the risk curve to drive returns,' he added. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Beyond the usual suspects The first half of this year saw brisk movement in the Japanese market. In June, for instance, Frasers Hospitality launched Yotel Tokyo Ginza in a tie-up with British hotel chain Yotel. The 244-room accommodation targeted at business and leisure travellers is located in Ginza, a shopping district popular among tourists in the Japanese capital. It is Yotel's first property in Japan. While the tie-up marks Frasers Hospitality's first investment and development project in Japan, the hotel is its second asset there. Its first, a 124-unit rental apartment in Osaka, was acquired through a joint venture with real estate investment firm Alyssa Partners. ' Property yields in Japan remain in the 3.5-4% range, creating a positive yield spread that remains highly attractive to investors. ' — Melvin Chay, senior director of capital markets at Knight Frank Singapore Other Singapore-based investors have also been ramping up their exposure. Early this year, real estate and private equity firm Patience Capital Group partnered with Hong Kong-based Gaw Capital to acquire Tokyu Plaza Ginza in Tokyo. It also raised 39 billion yen (S$343.4 million) for its Japan Tourism Fund to revitalise ski-resort towns such as Myoko in Niigata and Madarao in Nagano. CapitaLand Investment has likewise been active. In December 2024, it acquired four self-storage facilities in Osaka, and followed up in June 2025 with a mixed-use property in Tokyo. Others have cast their sights farther afield. Far East Hospitality Trust's first Japanese hotel acquisition, announced in February this year, was Four Points by Sheraton Nagoya. The trust's managers noted that the location – in central Japan – has vast potential for tourism, and grants travellers access to other destinations such as Nagano, Toyama, Kanazawa and Kyoto. Last year, CapitaLand Ascott Trust completed the acquisition of a 258-unit rental housing property in Fukuoka. More recently, it purchased two hotels, ibis Styles Tokyo Ginza and Chisun Budget Kanazawa Ekimae, for 21 billion yen. Why Japan still makes sense Even as global interest rates begin to decline, Japan's real estate market continues to present a compelling case for Singapore-based investors. The country's borrowing costs remain comparatively low. On Jun 17, the Bank of Japan maintained its benchmark short-term interest rate at 0.5 per cent, lower than that of most Asian markets. 'At the same time, property yields in Japan remain in the 3.5 to 4 per cent range, creating a positive yield spread that remains highly attractive to investors,' said Chay. Moreover, the yen's continued depreciation has made Japanese assets even more affordable for Singapore investors, enhancing the appeal of deals in both major cities and regional locations. ' Even if interest rates were to rise, Japan's interest rate is still among the lowest in the world. So you could still undoubtedly make a good yield spread here. ' — Jason Leong, head of investment and asset management at Frasers Hospitality Currently, S$1 is equivalent to about 113.58 yen. Five years ago, S$1 was equivalent to about 100.94 yen. This means that the yen has weakened about 12 per cent against the Singapore dollar over the last five years. 'Despite rising asset values in recent years, commercial real estate and hotel assets in popular tourist areas – such as Tokyo, Osaka and Kyoto – remain appealing to investors looking to grow their presence in Japan,' said Carmen Lee, head of investment research at OCBC. Japan's popularity among tourists is also translating into investor interest, particularly in the hospitality sector. Visitor arrivals hit a record 36.8 million in 2024, surpassing pre-pandemic highs. Jason Leong, head of investment and asset management at Frasers Hospitality, said that there is still 'a very visible yield spread' in hospitality property investments. 'Even if interest rates were to rise, Japan's interest rate is still among the lowest in the world. So you could still undoubtedly make a good yield spread here.' Frasers Hospitality is also confident in the growth of the Japanese market, he added. While there has been enormous growth in Japan tourism over the last decade, the tourism industry is not saturated yet, he noted. Looking ahead 'As one of the few mature markets with a relatively large investable stock in multiple cities and sectors, Japan will remain as a hot destination for Singapore property players,' said James Young, head of investor services for the Asia-Pacific, Europe, the Middle East and Africa at Cushman & Wakefield. Sectors such as hospitality, prime office and retail, senior housing, logistics and data centres continue to draw attention. Moreover, Singapore's market is limited in terms of assets available for acquisition. So most real estate investment trusts will look to add assets outside of the city-state for their earnings, said OCBC's Lee. While Japan remains hot, other markets are also warming up as global rates fall. 'The US, the UK, Australia and China selectively are now quite attractive from both pricing and long-term growth perspectives,' said Young. Investments in student housing and serviced apartments in cities such as London, Hong Kong, Sydney and Seoul are also likely to rise.
Business Times
17-06-2025
- Business
- Business Times
Four large-format HDB retail units in Ang Mo Kio, Bukit Merah, Clementi, Toa Payoh for sale
[SINGAPORE] Four Housing and Development Board (HDB) retail units located in the heart of various mature estates have been launched for sale through an expression of interest (EOI) exercise, said property consultant Knight Frank Singapore and real estate firm CBRE in a joint statement on Tuesday (Jun 17). Each unit spans two levels within standalone HDB commercial blocks that are 'strategically located' in the established town centres of Ang Mo Kio, Bukit Merah, Clementi and Toa Payoh. As the assets are fully commercial, they are not subject to Additional Buyer's Stamp Duty and Seller's Stamp Duty and are eligible for foreigner purchase, the two companies added. The EOI exercise closes at 3 pm on Jul 23. Each unit has a strata area of about 23,960 to 30,139 square feet (sq ft). Together, their combined strata area is about 104,808 sq ft. 'The fully tenanted portfolio presents an exceptional opportunity to acquire sizeable, income-generating commercial units in high-footfall locations,' read the statement. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Supermarket chain FairPrice currently anchors the blocks at Ang Mo Kio, Bukit Merah and Toa Payoh, while electronics retailer Courts occupies the Clementi property. The unit at 712 Ang Mo Kio Avenue 6 is near the Ang Mo Kio MRT station. PHOTO: KNIGHT FRANK The unit at 712 Ang Mo Kio Avenue 6 occupies the first and second levels of a four-storey HDB commercial block. The 23,982 sq ft unit has multiple street frontages and is a short walk from Ang Mo Kio MRT station. The 23,960 sq ft unit at 192 Toa Payoh Lorong 4 spans about half of both the first and second floors of a two-storey HDB commercial block within the Toa Payoh central precinct. The unit at 166 Bukit Merah Central is occupied by supermarket chain FairPrice. PHOTO: KNIGHT FRANK In Bukit Merah Central, the 30,139 sq ft unit consists of the entire sub-basement and part of the first level of Block 166, a three-storey commercial building in the town centre. The property features a prominent street frontage and houses the only supermarket in the area. The 26,727 sq ft unit at 451 Clementi Ave 3 occupies parts of the first and second levels of a three-storey standalone commercial building, which offers sheltered access to Clementi MRT station. The unit at 451 Clementi Avenue 3 is near Clementi MRT station. Knight Frank and CBRE noted that the properties are prominently positioned within 'bustling retail catchment zones', supported by nearby markets, food centres, polyclinics, essential services, MRT stations and bus interchanges. 'With only approximately 8,500 HDB commercial units available for private ownership, and the HDB no longer releasing such assets for sale, this portfolio represents a truly scarce and highly sought-after investment opportunity,' said Knight Frank Singapore chief executive Galven Tan. The properties may be sold on a portfolio or piecemeal basis.
Business Times
13-06-2025
- Business
- Business Times
Newton, Tanjong Rhu, Dover and Bedok plots among 11 new housing sites unveiled for sale; two EC parcels also on offer
[SINGAPORE] Eleven new sites for private residential projects have been made available under the government land sales (GLS) programme, including prime plots in Newton, Bukit Timah and Tanjong Rhu. Ten of the sites announced on Friday (Jun 13) are on the Confirmed List for the GLS programme for the second half of 2025. The last site, a 0.23-hectare (ha) plot in Cross Street in the Central Business District (CBD) for long-stay serviced apartment use, is on the Reserve List. Market watchers expect to see strong demand for the Newton and Tanjong Rhu sites – the first state land plots in these planning areas that have been unveiled for sale in almost three decades. The 0.59-ha site in Newton along Bukit Timah Road is expected to be hotly contested, and can be built into 340 units. The site is anticipated to launch in August. In 2007, it was set aside for transitional office use for a 15-year period to address the shortage of office space, said PropNex's head of research and content, Wong Siew Ying. Knight Frank Singapore's head of research, Leonard Tay, said that the last residential GLS site in the Newton Planning Area was awarded in July 1997. It has been developed into Draycott 8. The plot should draw strong interest from both developers and homebuyers due to its proximity to Newton MRT station, he added. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The Tanjong Rhu site, which can house around 525 units, is expected to be available for tender in November. It is next to the Singapore Swimming Club and a 10-minute walk away from Katong Park MRT station. Marcus Chu, ERA Singapore's chief executive officer, said: 'This is the first residential GLS plot to be released along Tanjong Rhu Road in nearly three decades, making it a rare opportunity for developers seeking to cater to sustained upgrader demand in the city fringe.' The last GLS residential site released in Tanjong Rhu was awarded in 1997, said Wong. The 99-year leasehold site was developed by Far East Organization into Water Place. Developers will also be able to bid for a Dunearn Road site, the second private residential site to be offered in the new Turf City housing estate, said Lee Sze Teck, Huttons Asia's senior director of data analytics. The site's launch date is expected to be in December. The 1.91-ha site can accommodate 335 private residential units and 1,400 square metres of gross floor area of retail space. It is within walking distance of Sixth Avenue MRT station and is near several popular schools, including Nanyang Girls' High School and Hwa Chong Institution, said PropNex's Wong. A 1.35-ha site along Dover Road set to launch in November is expected to yield 625 units – the biggest project on the H2 GLS 2025 list. 'Located near Singapore's (research and development) hub, one-north, and the Singapore Science Park, the Dover site addresses the housing shortage relative to the area's employment. Given the 50,000-strong workforce in one-north, this parcel… will bring residents closer to key employment hubs,' said Lee. Meanwhile, competition for a 380-unit Bedok Rise site – expected to be up for tender in September – could be strong, given the limited supply of unsold stock in this locale amid healthy demand for mass-market homes, said Wong. This is the last development site around Tanah Merah MRT station following the sale of Sceneca Residence in November 2020, she added. Based on caveats lodged, as at May 31, Sceneca Residence has sold 264 of its 268 units since the project hit the market in January 2023. Robust demand for ECs Two executive condominium (EC) sites are also being offered among the 11 residential sites announced on Friday, in a nod to robust demand for EC projects in recent years. The first, in Woodlands Drive 17, can be developed into 560 units. The other EC site, in Miltonia Close, can yield around 430 units. Together with the three EC sites released in the H1 GLS exercise, the supply of EC units on the Confirmed List now stands at 1,970 units, the highest number annually since 2014, said Wong. 'Increasing EC supply not only provides more housing options, but also mitigates the 'fear of missing out' effect that often drives prices higher during periods of limited availability,' SRI's head of research and data analytics, Mohan Sandrasegeran, said. EC land prices have risen steadily, with the most recent EC land tender awarded in November 2024 to Sim Lian. At S$768 per square foot (psf) per plot ratio for a Tampines site, it set a record. In the first quarter, there were about 735 new EC units sold at or above S$1,600 psf, based on URA Realis data, he said. 'Notably, this included at least 149 units sold at S$1,800 psf or more – crossing a pricing threshold that had previously not been breached in the EC market.' The last three plots on offer are a 1.4-ha site in Dairy Farm Walk which will allow for about 500 units, a 1.12-ha parcel in Kallang Avenue which can house 450 units, and a 1.65-ha plot in Lentor Central which can be built into 580 homes. Tricia Song, CBRE's head of research for Singapore and South-east Asia, said: 'There has been a scarcity of private home supply in the location – the most recent sizeable project was 212-unit freehold Kallang Riverside at Kampong Bugis, which was launched in 2014.' The Lentor Central site will be the eighth to be made available in the area, Huttons' Lee noted. It is next to GuocoLand's fully sold Lentor Modern and the recently launched Lentor Central Residences, which sold 93.3 per cent of its 477 units at an average price of S$2,200 psf over its launch weekend in March. 'The area is popular among buyers for its attractive entry price. Around 100 units from launched projects remain unsold,' he added. Cautious outlook Apart from the Confirmed List sites, there are six residential sites on the Reserve List. The Cross Street plot announced on Friday is next to Telok Ayer MRT station and can yield 300 long-stay serviced apartments. It may be attractive to investors keen on renting out units to foreign professionals working in the area, said Knight Frank's Tay. 'However, it remains to be seen whether demand for CBD residences will lead any developers to trigger this site in the Reserve List,' he added. PropNex's Wong said: 'This plot is not likely to be triggered soon, in view of long-stay serviced apartments being still an untested product, and the potential supply of residential units that may come on the leasing market, owing to several new launches in the city.' Among the remaining five residential sites on the Reserve List is Media Circle (Parcel B), which closed with no bids in April 2025. The rest are sites in Marina Gardens Lane, Holland Plain, River Valley Green and another Media Circle plot. CBRE's Song said: 'We believe placing more supply in the Reserve List is an appropriate response, taking into consideration the slower home sales since April, still-rising prices (and an uncertain) macroeconomic climate. Developers in the recent land tenders have also been measured in their bids, signalling their cautious outlook.'
Business Times
11-06-2025
- Business
- Business Times
Singapore retail vacancy creeping up with more tenants looking to exit
[SINGAPORE] Retail space vacancy across Singapore crept up in the first quarter as net take-up slowed and fresh supply hit the market, with leasing agents observing more tenants looking to pre-terminate their leases. Islandwide, retail vacancy inched up to 6.8 per cent in Q1 2025 from 6.2 per cent in the previous quarter, based on government data. Some 323,000 square feet (sq ft) of new space came on stream in Q1, a report by Savills Singapore showed. And net demand for retail spaces stood at a negative 129,000 sq ft in the period, reversing five quarters of positive take-up, as occupancy fell across most areas. More tenants are seeking to end their leases early, noted Sulian Tan-Wijaya, executive director of retail and lifestyle at Savills Singapore. 'This would have pushed up vacancy rates if not for new entrants taking up their spaces. For less prime developments, it could take some time for vacant spaces to be let, due to current market conditions leading to many operators adopting a wait-and-see approach,' she added. Ethan Hsu, head of retail at Knight Frank Singapore, said the slowdown in Singapore's retail and dining sectors has persisted for some time, driven by sustained inflationary pressures, a persistent labour crunch and weaker consumer demand. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up He added: 'Faced with rising costs, staffing shortages and heightened competition from new entrants, some retailers and food and beverage (F&B) operators are opting to exit the market to mitigate further losses.' According to the Fair Tenancy Industry Committee, tenants may pre-terminate their leases if the business principal is insolvent or if they lose the distributorship or franchise rights, provided that the loss is not due to tenants' non-performance or breach of contract. At least six months' notice is required, or a payment equivalent to six months' gross rent in lieu of notice. Landlords also require compensation equal to the security deposit amount. Although foot traffic has improved in some Orchard Road malls, retailers continue to grapple with cost pressures and cautious consumer spending, a Jun 6 report by Savills Singapore showed. 'The inability to fully pass on costs is leading to lower margins. Online sales are also resulting in lower spending at physical stores,' it said. It added that time is needed for the newly opened Punggol Coast Mall – which has more than 290,000 sq ft of retail area – and the revamped The Cathay to be absorbed into the market. Retail sales fell in February and March after a strong start in January, buoyed by the Chinese New Year celebration and government consumption vouchers. Overall F&B sales dipped 3.2 per cent on year in March as consumers cut back, especially in restaurants. Despite overall vacancy rising, rents held largely steady in Q1. Based on Savills' basket of retail properties, the average monthly rent in Orchard Road and suburban areas stayed flat at S$23.20 per square foot (psf) and S$14.70 psf, respectively. Rents in prime malls along Orchard Road remain supported by limited supply. As a result, landlords are still able to negotiate for higher rents, Savills noted, with some observing healthy momentum for lease renewals, particularly among luxury retailers. Data from the Urban Redevelopment Authority showed that central region retail rents declined 0.5 per cent in Q1, compared with a 0.6 per cent increase in the previous quarter. Ervin Yeo, CapitaLand's commercial management chief executive and group chief strategy officer, pointed out in a LinkedIn post on Jun 9 that occupancy cost – the proportion of total rent paid relative to tenant sales – remained below 20 per cent for tenants at CapitaLand and Frasers malls. 'While rent level is a quantitative headline measure, occupancy cost is an efficiency measure and a proxy for rent affordability,' he said. CapitaLand and Frasers are the two largest mall operators in Singapore, holding more than 20 malls between them in two real estate investment trusts (Reits), CapitaLand Integrated Commercial Trust (CICT) and Frasers Centrepoint Trust (FCT). 'For the two Reits, CICT (14 malls) and FCT (nine malls), 2024 occupancy costs were 17.1 per cent and 16 per cent, respectively,' Yeo said. 'This suggests that revenues of our tenants are at a sustainable level relative to their rents. In particular, the occupancy costs for the F&B trade category across CapitaLand malls (are) still less than 20 per cent, which is also lower than before Covid.' He also noted that since 2018, the compound annual growth rate of CapitaLand mall tenant sales psf has been 1.9 per cent, while rental growth has been 0.7 per cent. 'Growth in sales has outpaced growth in rents, which makes sense because leases are usually locked in for some years while sales can turn on a dime. Retailers who had leases locked in would have enjoyed the strong post-Covid sales growth over the past couple years without a corresponding increase in fixed rent.' For its first half ended March, FCT's retail portfolio recorded a committed occupancy of 99.5 per cent. Shopper traffic grew 1 per cent on year, and tenants' sales rose 3.3 per cent. The average portfolio rental reversion for H1 FY2025 was 9 per cent, on an average-to-average basis. The landlord also added 41 new brands to its portfolio, including China lifestyle retail brand KKV and restaurant chain Shu Da Xia Hotpot. Commenting on Yeo's LinkedIn post, Erwin Oei, chief operating officer of Metro's retail arm, said that margins vary widely across product categories. 'Luxury fashion, mid-tier beauty, or even multi-concept retail all operate with vastly different margin structures and sales velocities. Ultimately, it is the margin that sustains the occupancy cost, not just the topline.' He added: 'Flexible rent ramp-ups can encourage bold, footfall-driving concepts to take root.' ' Rapid expansion that has led to just as rapid closures in recent years cannot possibly be healthy, when it has also led to a wastage of funds and material, especially when new fit-outs and equipment are abandoned when operations prove to be financially unviable. ' — Ethan Hsu, head of retail at Knight Frank Singapore Alan Cheong, Savills Singapore's executive director of research and consultancy, expects more tenant turnover in malls this year as underperforming retailers either ride out their leases or exit early if they cannot keep up with costs. 'While prime spaces are still being snapped up quickly, the rate of closures could soon outpace new openings,' he said. Store closures hit a 19-year high of 3,047 in 2024. While openings still outpace closures, an earlier Knight Frank report characterised Singapore's F&B scene as 'overweight', saying: 'The dining scene appears to be reaching oversupplied levels.' 'Rapid expansion that has led to just as rapid closures in recent years cannot possibly be healthy, when it has also led to a wastage of funds and material, especially when new fit-outs and equipment are abandoned when operations prove to be financially unviable,' Knight Frank's Hsu said. He suggested limiting the number of F&B licences issued within certain geographical boundaries, or capping the percentage of net lettable area allocated for F&B and non-F&B units in a mall to a 'reasonable stakeholder-reviewed ratio'. With retail supply limited at under 400,000 sq ft of net lettable area each year, rents and occupancy are likely to be supported over the next two years, said Savills. A larger wave of supply – more than 1.2 million sq ft of net lettable area – is expected from 2028, led by developments such as the expansion of Marina Bay Sands. Savills expects growth in Orchard Road rents to hit the upper end of its 1 to 2 per cent forecast range this year, and suburban rents to come in around the lower end of the projected span.
