Retail Rents 09 3q2025 Global Brands Fill Gaps Left Exits
The latest data from the Urban Redevelopment Authority (URA) shows that overall retail rents in Singapore increased by 0.9% quarter-on-quarter (q-o-q) in the third quarter of 2025. This growth rate remains unchanged from the previous quarter.
According to a report by CBRE Research, prime floor rents across the island rose by 0.5% q-o-q, bringing year-to-date (YTD) growth to 1.8%. Despite reports of intense competition, high rents, and rising costs leading to store closures, the retail leasing market remained strong in the quarter, says Tricia Song, head of research for Singapore and Southeast Asia at CBRE.
The URA data also showed positive net absorption of 5,000 sqm (54,000 sq ft) in the private retail market islandwide, reversing two consecutive quarters of contraction. However, the addition of 13,000 sqm (140,000 sq ft) of new stock pushed the islandwide retail vacancy rate up from 7.0% in the second quarter of 2025 to 7.2% in the third quarter of 2025.
The URA Master Plan has placed a strong emphasis on enhancing transportation connectivity, particularly in outer regions like Sembawang. Among the various improvements, the North-South Corridor (NSC) stands out as a significant infrastructure project that will benefit local residents. Serving as Singapore’s first integrated transport corridor, the NSC will feature dedicated bus lanes, cycling routes, and pedestrian paths, connecting the northern areas of the island directly to the city center. For those residing in Sembawang Road EC, the NSC will offer quicker and more efficient travel options, significantly reducing travel time for both public and private transportation users. The upcoming NSC is a significant development for inhabitants of Sembawang Road EC, providing them with enhanced accessibility through the incorporation of the latest transport infrastructure. To learn more about this exciting project, visit Sembawang Road EC Canberra.
International brands continue to drive demand, despite some exits by local F&B operators due to increasing costs. Leonard Tay, head of research at Knight Frank Singapore, notes that these spaces have been quickly taken up by international chains, luxury brands, and specialised service providers such as beauty, wellness, and enrichment centres. Tay further adds that demand for retail spaces remains strong due to the desire for in-person and curated experiences.
The Orchard area saw the opening of new-to-market brands such as luxury candy retailer Sugarfina and Chinese beauty brand Joocyee at Wisma Atria, Middle Eastern dining brand WEWA at Orchard Central, and Australian self-serve yoghurt chain Yo-Chi’s first overseas outlet at Orchard Central.
Orchard saw a positive net demand of 32,000 sq ft in the third quarter of 2025, driven by strategic store openings amidst the recovery of the tourism sector, notes Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield (C&W). Some notable openings in the area include The Planet Traveller’s largest Asian flagship at ION Orchard, Lululemon x Within’s first integrated yoga and Pilates concept store in Southeast Asia at Takashimaya Shopping Centre, and Carousell Luxury’s debut physical store at The Centrepoint.
In the Downtown Core submarket, there was a positive net absorption of 9,000 sqm (97,000 sq ft), making it the best-performing area in the quarter, while the Outside Central Region (OCR) saw negative net absorption of a similar amount after outperforming in the previous quarter. “Rising rents may have prompted some retailers to explore alternative locations, despite the OCR’s resilient local catchment,” says Song.
The demand for retail spaces from Chinese brands continues to expand beyond F&B and fashion into beauty, health, and wellness. Some examples include Joocyee, head and scalp spa TTE Elephant at Marina Bay Link Mall, and eyewear brand Bolon, which has been expanding since its first store in Wisma Atria in 2017.
Overall, the retail market in the suburban areas remains strong, with a positive net demand of 32,000 sq ft in the third quarter of 2025. However, the completion of Lentor Modern Mall in August contributed to the OCR’s higher vacancy rate, which increased from 4.5% in the second quarter of 2025 to 5.9% in the third quarter of 2025.
High-traffic suburban locations continue to attract activity-based retailers, such as F&B and athleisure operators Adidas, Skechers, and Wilson, who have opened four outlets since their debut in late 2024, notes Ong Kah Seng, CEO of R’ST Research. New entrants in the suburban areas include Swiss sportswear brand On, which opened a two-storey Southeast Asia flagship at Jewel Changi Airport, KKV at Bedok Mall, Jem, and Tiong Bahru Plaza, and OH!SOME’s first outlet at Tampines 1.
With limited new supply in the market, C&W expects prime retail rents in Singapore to increase by 1-2% year-on-year in 2025. The annual completions are projected to be around 0.3 million sq ft between 2026 and 2029, which is less than half of the 10-year historical average. In the near term, smaller developments, such as CanningHill Square and Chill @ Chong Pang, will be completed, while larger malls like Bukit V Mall and Tanglin Shopping Centre are only expected to be completed by 2028.
Despite challenges such as manpower shortages, elevated costs, and competition from e-commerce, retailers’ confidence remains strong, particularly for new-to-market brands attracted to Singapore’s large office workforce and the rebound of tourism. This has resulted in declining vacancy rates in prime areas, such as Orchard, which saw a drop from 8.1% in the second quarter of 2025 to 7.1% in the third quarter of 2025. CBRE Research forecasts that overall prime retail rents will see growth of 2.3% in 2025, returning to pre-COVID-19 levels.