Singapore’s retail market is experiencing a two-speed dynamic, according to Savills Singapore. In Q2 2025, islandwide retail vacancy rose by 0.3 percentage points to 7.1%, primarily due to weaker demand in the Central Region, where vacancy increased by 0.6 percentage points to 8.2%. This contrasts with the Suburban Area, where stable footfall and spending on essentials kept the vacancy rate steady at 5.2%.
Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, noted, “Margins for many retailers are falling or even turning negative, with weaker demand particularly evident in the Central Region. However, suburban malls with strong connectivity and large local catchments are proving more resilient.” He added that the limited supply pipeline over the next two years could support occupancy and rents, although the performance gap between prime and weaker malls is expected to widen.
Retail sales, excluding motor vehicles, weakened in May and June, with less than half of the categories showing year-on-year gains. Food and beverage sales ended the quarter with a 0.4% decline compared to the previous year. Despite this, Savills reported a slight uplift in rents, with Orchard Area malls seeing a 0.5% increase and suburban malls a 0.4% rise in Q2 2025.
Looking ahead, the supply of new retail space is set to moderate, with completions estimated at 570,000 square feet in 2025, down from 679,000 square feet in 2024. This reduction in supply is expected to continue until larger projects, such as the Marina Bay Sands expansion, are completed towards the end of the decade. Sulian Tan-Wijaya, Executive Director of Retail & Lifestyle at Savills Singapore, remarked that the limited supply in the city centre has kept occupancy rates healthy, despite soft retail sales.
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