Prime retail rents mostly flat in 1Q2025 as F&B scene shows signs of oversupply: Knight Frank
Potential actions include limiting the number of F&B licences provided within a particular area, capping the proportion of net lettable area allocated for F&B in a mall to a stakeholder-reviewed ratio, or imposing a tax obligation on F&B chains that increase beyond a specific range of shops within a designated period. “These can all act as a call for F&B operators not to bite off greater than they can eat and expand the growth of F&B to an extra acceptable and lasting pace,” adds Hsu.
Pointing out data from the Accounting and Corporate Regulatory Authority (Acra), Knight Frank notes that a total amount of 3,047 F&B businesses closed down in 2024– the biggest number ever since 2005. On the other hand, 3,793 F&B businesses were developed the same year, the second-highest figure ever since 3,934 openings in 2021.
The rapid entries and exits of F&B brands might indicate an indicator of over growing and the need for intervention to stabilise the marketplace, states Knight Frank. “The dining scene appears to be reaching oversupplied values, and determines to cool the market for a sustainable sector might be required sooner as opposed to later,” claims Ethan Hsu, head of retail at Knight Frank Singapore.
The largely stale leas adhere to mixed retail sales productivity in 1Q2024. Whilst data from the Singapore Department of Statistics showed retail sales leaving out car rebounding from a year-end depression to strike $4 billion in January on the back of Chinese New Year festivities, it subsequently tumbled to $3.2 billion in February prior to rising back up to $4.2 billion in March.
Together, the F&B situation has actually seen an accelerated pace of dining establishments establishing and closing, adds the Knight Frank information. In 1Q2025, F&B labels including Eggslut, Manhattan Fish Market, Prata Wala and Burge & Lobster shuttered their stores, while hotpot chain Haidilao closed 2 sites.
Singapore prime retail rentals remained greatly condo in 1Q2025 amidst a retail environment that remains to deal with rising operating costs and labour restrictions, says Knight Frank Singapore. According to a research record published by the business in April, prime retail rents in Orchard averaged at $31.20 psf per month (pm) past quarter, inching up just 0.4% q-o-q.
Prime retail spaces in the Marina Centre, City Hall and Bugis areas averaged 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 rents averaged $26.80 psf pm, up 0.3% q-o-q.
Given the persistent high-cost environment and the increasingly affordable F&B scene, the outlook for the retail stays tough, states Knight Frank. In addition, sweeping tariffs revealed by US Head of state Donald Trump might drag down business sentiment. “For a small trading state like Singapore, this may have significant effects that could undermine [Knight Frank’s] delicate 1% to 3% progress foresight of prime retail leas in 2025,” claims Hsu.
