Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
The commonly inactive leas follow mixed retail sales productivity in 1Q2024. While data from the Singapore Department of Statistics showed retail sales leaving out motor vehicles rebounding from a year-end depression to strike $4 billion in January on the back of Chinese New Year events, it subsequently fell to $3.2 billion in February before climbing back up to $4.2 billion in March.
Prime retail areas in the Marina Centre, City Hall and Bugis spots equated at $26.40 psf pm in 1Q2025, up 0.6%, while city-fringe prime retail rents dipped 0.3% q-o-q to $24 psf pm. Suburban prime retail rents averaged $26.80 psf pm, up 0.3% q-o-q.
Together, the F&B setting has actually observed an increased speed of dining establishments establishing and closing, adds the Knight Frank report. In 1Q2025, F&B brands consisting of Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their shops, whilst hotpot chain Haidilao closed two sites.
Mentioning data from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notes 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 created the same year, the second-highest number since 3,934 beginnings in 2021.
The rapid entries and exits of F&B brands can indicate an indication of overgrowth and the demand for intervention to stabilise the market, says Knight Frank. “The dining scene appears to be getting to oversupplied amounts, and gauges to cool the marketplace for a lasting market might be required sooner rather than later,” states Ethan Hsu, head of retail at Knight Frank Singapore.
Singapore prime retail leas stayed mainly condo in 1Q2025 amid a retail environment that remains to face rising operating expense and labor constraints, says Knight Frank Singapore. According to a research record released by the company in April, prime retail rents in Orchard averaged at $31.20 psf per month (pm) last quarter, inching up just 0.4% q-o-q.
Prospective actions consist of restricting the amount of F&B licences issued within a specific area, capping the proportion of net lettable area designated for F&B in a mall to a stakeholder-reviewed proportion, or enforcing a tax obligation on F&B chains that broaden beyond a particular number of shops within a designated period. “These can all serve as a call for F&B operators not to bite off greater than they can chew and spread out the development of F&B to an extra acceptable and sustainable pace,” adds Hsu.
Given the persistent high-cost environment and the increasingly affordable F&B scene, the outlook for the retail continues to be difficult, claims Knight Frank. Furthermore, sweeping tariffs announced by United States Head of state Donald Trump can pull down business view. “For a smaller trading nation like Singapore, this could have far-reaching results that could undermine [Knight Frank’s] delicate 1% to 3% development foresight of prime retail leas in 2025,” says Hsu.
