Retail Rents 09 3q2025 Global Brands Fill Gaps Left Exits
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In the third quarter of 2025, overall retail rents in Singapore saw a modest 0.9% increase compared to the previous quarter, according to data released by the Urban Redevelopment Authority (URA) on October 24. This growth rate was consistent with the 0.9% growth seen in the previous quarter.
CBRE Research reported that prime floor rents across the island rose by 0.5% on a quarter-on-quarter basis, bringing the year-to-date growth to 1.8%. Despite concerns over intense competition, high rents and rising costs leading to store closures, leasing activity remained strong during the quarter, as stated by Tricia Song, head of research for Singapore and Southeast Asia at CBRE.
The URA data also showed a positive net absorption of 5,000 sqm (54,000 sq ft) in the private retail market islandwide, reversing two consecutive quarters of decline. 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.
International brands continue to drive demand even as some stores exit the market. According to Leonard Tay, head of research at Knight Frank Singapore, several local F&B operators have been forced to close down due to rising costs. However, their spaces have been quickly taken up by international chains, luxury brands, and specialized service providers such as beauty, wellness, and enrichment centers. Tay also adds that the demand for retail space remains strong, driven by the desire for in-person and curated experiences.
New international brands, such as luxury candy retailer Sugarfina and Chinese beauty brand Joocyee, have entered the Orchard area in the third quarter. Middle Eastern dining brand WEWA and Australian self-serve yogurt chain Yo-Chi also opened their first outlets in the Orchard area.
The prime Orchard and Downtown Core areas saw the strongest growth, with positive net absorption of 32,000 sq ft and 9,000 sqm (97,000 sq ft) respectively. According to Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield (C&W), this was driven by strategic store openings as the tourism sector recovers.
Some notable openings in the Orchard area included 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.
Meanwhile, the retail vacancy rate in the Downtown Core area dipped to 6.5% in the third quarter of 2025 after two consecutive quarters of increase. According to Wong, this reflects continued interest in prime locations and the limited availability of high-quality space. International visitor arrivals have also reached 90% of pre-Covid levels as of September 2025 year-to-date, supported by a robust calendar of MICE activities and major entertainment events.
In the suburban areas, retail demand remained steady, with positive net absorption of 32,000 sq ft in the third quarter. The completion of Lentor Modern Mall in August also contributed to the higher vacancy rate in the Outside Central Region (OCR), which rose to 5.9% in the third quarter of 2025 from 4.5% in the second quarter of 2025. High-traffic suburban locations continue to attract activity-based retailers, particularly in the F&B and athleisure sectors.
Looking ahead, C&W expects prime retail rents to rise by 1-2% year-on-year in 2025, with limited new supply in the market. Annual completions are projected at an average of 0.3 million sq ft between 2026 and 2029, which is less than half the 10-year historical average. Despite challenges such as manpower shortages, elevated costs, and competition from e-commerce, tourism recovery is expected to sustain demand for prime retail spaces. CBRE Research also forecasts an overall growth rate of 2.3% for 2025, bringing prime retail rents back to pre-Covid levels.