Singapore’s retail sector has maintained a stable vacancy rate of 6.3% in the first quarter of 2026, according to Savills Research. Despite a decline in leasing demand and increased tenant turnover, the limited supply pipeline has supported occupancy, particularly for well-located retail properties.
Savills estimates that the supply of retail space will be approximately 427,000 square feet of net lettable area in 2026, slightly below the five-year average. New completions are expected to decrease further in 2027, with a significant increase anticipated from 2028 due to major redevelopment projects. This limited supply is projected to keep annual retail completions at an average of 270,000 square feet over the next two years.
The suburban retail market has shown resilience, with a net absorption of 140,000 square feet in the first quarter, supported by stable demand and limited new supply. Prime shopping areas continue to attract interest, with units like the one vacated by T2 Tea at 313@Somerset quickly re-leased to Goldheart.
However, smaller malls and less visible locations face challenges, with Bugis Street seeing only 20% of its second-floor shops in operation. Retail rental performance has softened, with average monthly rents in prime Orchard Area malls edging up 0.1% to S$23.60 per square foot, whilst suburban rents increased by 0.2% to S$14.90 per square foot.
Savills’ Executive Director, Sulian Tan-Wijaya, noted that retailers are focusing on malls with stable footfall and good accessibility. Looking ahead, landlords are expected to optimise tenant mixes and enhance experiential offerings to maintain traffic and sales, with rents for Orchard Road and suburban malls projected to rise by up to 2% this year.
