With rents at US$354 (S$441) psf per year, Singapore’s Orchard Road has retained its position as the 16th most expensive retail location in the world, according to a new report from Cushman & Wakefield.
Topping the list is Hong Kong, where luxury brands and jewellery retailers remain the dominant tenants in prime locations, followed by New York, Paris, London and Tokyo.
Rents in Singapore remained stable across all sub-sectors over the year to June 2013, with fast fashion brands like Uniqlo and H&M actively expanding into suburban malls. Such schemes are steadily shedding their perceived image as locations populated by budget brands and they are increasingly marketed from a more diverse perspective.
Meanwhile, the revamp of Orchard Road has provided luxury retailers with more options. These retailers have been increasingly “opting to operate from stand-alone stores with prominent and dual/high frontages along the road”, noted the report.
While the completion of Capitol Piazza at the fringe of Orchard Road could attract more luxury retailers, it is unlikely to replace Orchard Road and The Shoppes at Marina Bay Sands as the premier luxury destination.
Moving forward, the city-state’s retail market “is expected to benefit from low unemployment, healthy economic fundamentals and strong tourist numbers. Existing retailers will be keen to maintain their share, while others will seek to establish a presence. However, efforts to control foreign labour in the country may have an impact on the ability of retailers to expand quickly”, the report said.
As for the luxury market, it will likely remain stable as long as there is a steady influx of Indonesian and Chinese tourists.