The prime retail scene in Singapore demonstrated remarkable steadiness in the second quarter of 2026, with a notable concentration of demand among luxury brands, international retailers, and experiential concepts. These trends were particularly evident in high-end districts like Orchard Road and the city center, as reported by Savills, a globally recognized real estate services provider.
Stable Vacancy Rates in Prime Areas
The overall vacancy rate in Singapore’s Central Region held firm at 7.5% during the quarter. Breaking down this figure, Orchard’s vacancy rate maintained a stable level of 7.2%, reflecting sustained demand and limited new supply in the area. Meanwhile, Downtown Core saw a slight uptick to 7.4%, likely due to softer leasing activity. Conversely, Fringe Area vacancy reached a three-year low of 7.1%, primarily as a result of the closure of HarbourFront Centre for redevelopment, which reduced the available retail stock in the area.
Savills’ report indicated a growing preference among occupiers for larger stores, driven by a desire to enhance brand presence and customer engagement. This shift has led to a refresh of tenant mixes in prime retail spaces, with underperforming retailers exiting the market and making way for new concepts. The evolving retail mix has seen increased participation from food and beverage operators, athleisure brands, beauty concepts, and experience-led tenants.
Rentals Bounce Back in Prime Retail Spaces
In a positive turn of events, the Urban Redevelopment Authority’s Central Region retail rental index rebounded by 0.6% in the second quarter, reversing the decline experienced in the first quarter. This recovery was primarily driven by Fringe Area rents, which rose by 1.3%, while Central Area rents increased by a modest 0.2%.
Related: Investors Eye Singapore’s Mid‑Term Rental Shortage
The rental resurgence was evident in prime Orchard Area malls, where average monthly rents rose by 0.3% to S$23.70 per sq ft. This growth can be attributed to the continued attraction of luxury and international brands to these prime locations. While prime suburban mall rents remained unchanged at S$14.90 per sq ft, this stability is a sign to the resilience of demand and limited vacancy in these areas.
Savills noted that while prime malls continued to draw luxury and international brands, broader rental growth was tempered by selective occupier demand. This selectivity is a reflection of retailers’ ongoing cautious approach to expansion, focusing on high-performing locations and concepts that align with their brand identity and customer preferences.
Despite pockets of weakness, such as the slight increase in overall islandwide retail vacancy to 6.5%, the prime retail setting in Singapore’s Central Region demonstrated resilience. The demand for larger-format stores and experiential concepts, coupled with the strategic repositioning of tenant mixes, drove the market forward. Looking ahead, the retail setting in Singapore appears poised to continue its steady trajectory, barring any significant external shocks.
