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Rental forecasts for Singapore’s retail property market by the end of the year are expected to be dampened by weaker-than-expected consumer spending, according to Alan Cheong, executive director of research and consultancy at Savills Singapore. The monthly retail sales index (excluding motor vehicles) and food and beverage (F&B) sales index have mainly shown negative y-o-y changes this year, indicating a relatively weak consumer spending in 2024. As a result, Cheong predicts a 2% increase in rents for prime Orchard Road properties, falling short of the initial forecast of 3% to 5% at the start of the year. Suburban retail rents are also expected to remain flat, in line with the initial forecast. However, recent research jointly published by DBS and Singapore Management University (SMU) suggests that consumer concerns over inflation have mostly moderated in recent quarters. The consumer spending data published by the Singapore Department of Statistics also revealed a 0.3% y-o-y increase in retail sales (excluding motor vehicles) in October, after a decline in September. Despite the influx of headlining concerts, conferences and exhibitions in Singapore this year, retail spending and rental rates have only seen limited support, with the footfall generated by these events having a nuanced effect on surrounding malls. While concerts typically drive higher foot traffic to nearby malls, other MICE events have not had a similar impact. Business event attendees tend to stay exclusively at the event venue and even the Formula One Grand Prix, which generates an annual average of $125 million in tourist receipts, has not significantly boosted foot traffic in tourist-centric areas. However, Sulian Tan-Wijaya, executive director of retail and lifestyle at Savills Singapore, notes that Singapore’s premier status as a regional hub has continued to attract noteworthy new-to-market brands and F&B concepts. This has supported demand for retail spaces and rents, with all prime shopping malls along Orchard Road enjoying relatively high occupancy rates this year. New-to-market retail brands, F&B concepts, and wellness experiences have also helped support demand for retail spaces and rents. Going forward, landlords may have more flexibility next year to implement positive rental adjustments, as the supply of new retail spaces becomes more limited. This could allow them to remain relevant in the rapidly evolving consumption patterns of both locals and tourists. Similarly, Cheong believes that more retailers will optimise their real estate strategies next year, taking advantage of the strong momentum in the entry of new-to-market F&B brands into Singapore.