Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
Prospective actions include restricting the number of F&B permits released within a specific area, capping the portion of net lettable area allocated for F&B in a mall to a stakeholder-reviewed ratio, or enforcing a tax on F&B chains that expand past a particular range of avenues within a designated period. “These can all function as a call for F&B operators not to bite off greater than they can eat and expand the growth of F&B to an extra fair and lasting pace,” adds Hsu.
Provided the consistent high-cost atmosphere and the increasingly competitive F&B scene, the outlook for the retail stays challenging, says Knight Frank. In addition, sweeping tariffs announced by US President Donald Trump can drag down business position. “For a smaller trading nation like Singapore, this might have far-reaching impacts that can undermine [Knight Frank’s] delicate 1% to 3% development projection of prime retail rents in 2025,” claims Hsu.
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Singapore prime retail rentals remained greatly condo in 1Q2025 amid a retail environment that remains to face increasing operating expense and labor restrictions, claims Knight Frank Singapore. According to a research report released by the company in April, prime retail rents in Orchard equated at $31.20 psf per month (pm) past quarter, inching up just 0.4% q-o-q.
Citing data from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notes that a total amount of 3,047 F&B businesses closed down in 2024– the biggest number ever since 2005. On the other hand, 3,793 F&B businesses were formed the same year, the second-highest figure since 3,934 starts in 2021.
The rapid entries and exits of F&B brands can point to an indication of over growing and the demand for intervention to stabilise the marketplace, states Knight Frank. “The dining scene appears to be getting to oversupplied values, and gauges to cool down the market for a sustainable field might be required sooner as opposed to later,” states Ethan Hsu, head of retail at Knight Frank Singapore.
The mostly stagnant rents adhere to blended retail sales productivity in 1Q2024. While information from the Singapore Department of Statistics revealed retail sales excluding motor vehicles rebounding from a year-end slump to hit $4 billion in January on the back of Chinese New Year events, it ultimately tumbled to $3.2 billion in February before rising back up to $4.2 billion in March.
Prime retail areas in the Marina Centre, City Hall and Bugis areas averaged at $26.40 psf pm in 1Q2025, up 0.6%, whilst city-fringe prime retail rents dropped 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 seen an accelerated rate of restaurants establishing and shutting down, adds in the Knight Frank information. In 1Q2025, F&B brands consisting of Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their shops, whilst hotpot chain Haidilao closed 2 outlets.
