Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
Prospective actions consist of restricting the number of F&B licences issued within a certain area, capping the percentage of net lettable area designated for F&B in a mall to a stakeholder-reviewed proportion, or enforcing a tax on F&B chains that expand beyond a certain number of avenues within a designated period. “These can all act as a call for F&B drivers not to bite off greater than they can eat and spread out the growth of F&B to an extra reasonable and lasting pace,” includes Hsu.
Citing information from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank observes that a total amount of 3,047 F&B businesses shut down in 2024– the top number ever since 2005. On the other hand, 3,793 F&B businesses were created the same year, the second-highest figure since 3,934 openings in 2021.
Prime retail spaces in the Marina Centre, City Hall and Bugis areas 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 rentals evened out $26.80 psf pm, up 0.3% q-o-q.
At the same time, the F&B setting has actually seen an increased pace of eateries setting up and shutting down, adds the Knight Frank report. In 1Q2025, F&B labels including Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their stores, whilst hotpot chain Haidilao shut two sites.
The rapid entries and exits of F&B brands can indicate a sign of overgrowth and the demand for intervention to stabilise the market, claims Knight Frank. “The dining scene seems getting to oversupplied amounts, and determines to cool down the marketplace for a lasting sector might be needed earlier instead of later on,” states Ethan Hsu, head of retail at Knight Frank Singapore.
The largely inactive rents adhere to blended retail sales productivity in 1Q2024. Whilst data from the Singapore Department of Statistics showed retail sales excluding motor vehicles reviving from a year-end depression to strike $4 billion in January on the back of Chinese New Year events, it consequently tumbled to $3.2 billion in February before rising back up to $4.2 billion in March.
Offered the consistent high-cost atmosphere and the significantly competitive F&B scene, the outlook for the retail remains tough, claims Knight Frank. Additionally, sweeping tariffs announced by United States President Donald Trump can pull down business position. “For a smaller trading state like Singapore, this might have far-reaching effects that might undermine [Knight Frank’s] delicate 1% to 3% growth projection of prime retail rents in 2025,” claims Hsu.
Singapore prime retail rents stayed mostly apartments in 1Q2025 amid a retail setting that remains to deal with rising operating costs and labour restrictions, says Knight Frank Singapore. According to a research record released by the company in April, prime retail rentals in Orchard equated at $31.20 psf per month (pm) last quarter, inching up just 0.4% q-o-q.
