The latest retail report from Knight Frank Singapore highlights the importance of collaboration between landlords and retailers to navigate the current economic challenges. Galven Tan, CEO of Knight Frank Singapore, emphasised that geopolitical shocks could reshape demand flows, benefiting adaptive retail destinations. He noted that early cooperation could help protect occupancy and capture diverted demand.
Prime retail rents in Singapore saw a modest increase, with Orchard Road rents at S$31.80 per square foot per month and suburban areas at S$27.50. The island-wide average gross rent of prime retail space rose by 0.8% quarter-on-quarter in Q1 2026, marking a 3% year-on-year increase.
International visitor arrivals (IVAs) in Singapore reached 4.4 million in Q1 2026, boosting retail spending. This figure represents a 9.8% increase from the previous quarter and a 2.8% rise from Q1 2025. The tourism sector is expected to surpass the record S$29.8b in receipts set in 2024.
Despite a challenging cost environment, the number of retail outlets and food and beverage establishments grew in 2024. However, many operators face pressure on profit margins. The report also noted closures of several well-known brands, whilst others, like Scarpetta and Molly Tea, introduced new concepts to adapt to changing consumer preferences.
The retail sector is increasingly shifting towards social commerce, supported by initiatives from the Singapore Retailers Association and TikTok Shop. This move aims to enhance digital engagement and revenue channels for retailers.
Looking ahead, Knight Frank maintains its forecast for prime retail rents to grow between 2% and 4% in 2026, driven by potential increases in tourist demand and new attractions despite ongoing geopolitical uncertainties.
