Despite the uncertain economic future and the number of developments that will be coming on stream in the very near future, rentals for prime retail space along Orchard Road are expected to do well as location is the most critical success factor in retail sales and top brands are willing to pay a high premium for it.

One sector of the property market that seemed to be resilient is the super-prime retail space along Orchard Road. Super-prime retail space is defined as space facing Orchard Road or in atriums. The rentals for such prime retail space have hit a record high of $80 psf per month at Ion Orchard – the 325,000 sq ft upscale shopping complex. The sudden increase in the top rent has brought the average psf rent per month to over $40 – a new record.

Rents for retail space at Ion start at $20 psf per month for units at the basement levels, which will include F&B outlets and bridge brands.

Local retailers such as Club 21, Kwang Sia Fashion and Wing Tai have already signed deals to occupy 40,000 sq ft at between $20 psf and $80 psf per month depending on different attributes of the retail space.

• Club 21 has already agreed on 22,000 sq ft for brands such as Giorgio Armani, Dolce & Gabbana, Marc Jacobs and Armani Exchange.
  
  
• Kwang Sia, which manages the Hugo Boss franchise here, will open Max Mara, Max & Co, Dsquared and Boss Selection in Ion.
  
  
• Meanwhile Wing Tai will close its Topshop/Topman outlet in Wisma next Thursday and re-open the store in the form of a 12,000 sq ft, double-storey flagship in Ion next year.

However, some top retailers have already fled the Orchard belt. For example, Belbon, the agent for luxury brands Jean Paul Gaultier and Kenzo was locked out of its two stores in Paragon Shopping Centre after failing to pay rents since 6 months ago.

According to a report by DTZ, retail property market remained stable in the second quarter due mostly to positive consumer sentiment and the Great Singapore Sale. Turnover rents rose but growth for fixed growth rents was limited.

First-storey monthly fixed gross rents remained largely unchanged quarter on quarter, hovering at an average of $42.40 per square foot (psf) for prime areas such as Orchard/Scotts Road, $33.70 psf in suburban areas and $27.10 psf in other city areas.

However, the future supply of about 5.4 million square feet of retail space from Q3 2008 to 2012 may put a lid on any drastic price spike. The retail space will be from projects such as ION Orchard, Orchard Central and Marina Bay Sands.

Riding on the back of a sizzling hot office rental market, rents in business parks and high-tech industrial sites are heading north as well.

According to a report by CB Richard Ellis, not only the occupancy rate for these sites is at about 90%, the rents have also increased by about 6.8% in May 2008.

The increasing popularity of business parks is due to companies shying from the over-priced downtown prime office space - some commanding as high as $16 psf per month.

Last year, prime office rents nearly doubled on the back of tight office space and a strong demand from occupiers, including global financial institutions expanding their operations in Singapore. This was on top of the 50%-plus rise that prime office rents registered in 2006.

And in order to placate this demand, more business park and other high-tech sites are being built in Singapore. Recently, two business park sites in one-north were awarded.

Riding on the back of a sizzling hot office rental market, rents in business parks and high-tech industrial sites are heading north as well.

According to a report by CB Richard Ellis, not only the occupancy rate for these sites is at about 90%, the rents have also increased by about 6.8% in May 2008.

The increasing popularity of business parks is due to companies shying from the over-priced downtown prime office space - some commanding as high as $16 psf per month.

Last year, prime office rents nearly doubled on the back of tight office space and a strong demand from occupiers, including global financial institutions expanding their operations in Singapore. This was on top of the 50%-plus rise that prime office rents registered in 2006.

And in order to placate this demand, more business park and other high-tech sites are being built in Singapore. Recently, two business park sites in one-north were awarded.

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