Singapore’s mall vacancies jump to highest level in a decade
SINGAPORE — Singapore mall vacancies rose to the highest level in a decade in the third quarter as an oversupply of shop spaces added to muted spending by shoppers.
A gauge of mall vacancies rose 0.6 per cent to 8.4 per cent in the three months ended Sept 30, even as rents declined 1.5 per cent in the quarter, data from the Urban Redevelopment Authority showed on Friday (Oct 28). That’s the highest vacancy rate since Sept 2006.
Demand for shopping space is being dented as consumers rein in spending amid slowing growth and buyers increasingly turn to shopping online. That’s converging with a rising supply of mall space, which threatens to further squeeze rents. Singapore will add almost 4 million sq ft of retail space over the next three years, according to data from Cushman & Wakefield.
Singaporeans are among the most tech-savvy spenders in Asia, with a greater percentage shopping online than customers in Hong Kong and Malaysia, according to data from MasterCard. Singapore’s retail market is also reeling from the impact of China’s slowing economy, and a pullback in spending by tourists, especially those from the mainland. Tourism spending fell for the first time in six years in 2015, even as tourist arrivals rose.
It’s not just the retailers feeling the heat. Office landlords too are struggling to maintain rents amid rising supply. Office vacancies rose to the highest in more than four years despite rents sliding 1.1 per cent in the quarter. Prices of office space decreased 0.4 per cent in the quarter compared with a 1.5 per cent decline in the previous three months.
Residential rents dropped 1.2 per cent in the three months to Sept 30 to the lowest since June 2010, the data showed. Singapore home prices dropped by the most in more than seven years as developers offered discounts amid signals from the government that it won’t roll back property curbs initiated in 2009. The price index fell 1.5 per cent in the third quarter, the data show. That’s unchanged from preliminary figures published on Oct 3. BLOOMBERG