Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
Prospective steps include restricting the amount of F&B permits provided within a particular place, capping the proportion of net lettable location allocated for F&B in a mall to a stakeholder-reviewed proportion, or imposing a tax on F&B chains that increase beyond a specific number of avenues within a designated period. “These can all work as a call for F&B operators not to bite off greater than they can chew and spread out the growth of F&B to a more acceptable and lasting pace,” includes Hsu.
Prime retail areas in the Marina Centre, City Hall and Bugis places equated at $26.40 psf pm in 1Q2025, up 0.6%, while city-fringe prime retail rents decreased 0.3% q-o-q to $24 psf pm. Suburban prime retail rents evened out $26.80 psf pm, up 0.3% q-o-q.
Provided the persistent high-cost atmosphere and the significantly affordable F&B scene, the outlook for the retail remains challenging, states Knight Frank. Additionally, sweeping tariffs revealed by United States President Donald Trump could drag down business sentiment. “For a smaller trading nation like Singapore, this might have far-reaching results that can weaken [Knight Frank’s] delicate 1% to 3% progress projection of prime retail rents in 2025,” claims Hsu.
The quick entries and exits of F&B brands could point to an indication of overgrowth and the need for intervention to secure the marketplace, claims Knight Frank. “The dining scene appears to be reaching oversupplied values, and gauges to cool down the marketplace for a lasting sector may be needed earlier instead of later,” says Ethan Hsu, head of retail at Knight Frank Singapore.
The mostly stale rents follow blended retail sales performance in 1Q2024. Whilst information from the Singapore Department of Statistics presented retail sales leaving out car rebounding from a year-end depression to hit $4 billion in January on the back of Chinese New Year celebrations, it ultimately slipped to $3.2 billion in February before moving back up to $4.2 billion in March.
Pointing out data from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notices that a total of 3,047 F&B businesses closed down in 2024– the highest number since 2005. On the other hand, 3,793 F&B businesses were formed the same year, the second-highest number ever since 3,934 starts in 2021.
At the same time, the F&B situation has observed an increased rate of eateries establishing and shutting down, adds in the Knight Frank information. In 1Q2025, F&B brand names including Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their stores, whilst hotpot chain Haidilao closed 2 sites.
Singapore prime retail rentals stayed mainly condo in 1Q2025 amidst a retail environment that continues to deal with increasing operating expense and labor restraints, says Knight Frank Singapore. According to a research report published by the company in April, prime retail rentals in Orchard averaged at $31.20 psf per month (pm) past quarter, inching up just 0.4% q-o-q.
