Against the backdrop of geopolitical tensions and economic uncertainties, Singapore’s retail market remains bifurcated. The average price for retail space in the Central Region increased by 2.2% q-o-qin 1Q2026, compared with 1.7% quarterly increase in 4Q2025.
On the other hand, retail rents decreased by 0.6% q-o-q in 1Q2026, reversing the 0.6% quarterly increase in 4Q2025. But this was not an even decline, with rents in the Central Area falling 0.2% q-o-q, while rents in the city-fringe recorded a quarterly decline of 1.5%.
On a yearly basis, retail rents rose 1.8% last quarter, nearly matching the 1.9% y-o-y growth that was clocked in 4Q2025. This is broadly aligned with the relatively buoyant consumer sentiment in prime retail spaces, according to Knight Frank.
Leonard Tay, Head of Research at Knight Frank, suggests that last quarter’s rental decline could signal that some landlords are recalibrating their expectations and becoming more attuned to tenants’ operating pressures.
By engaging tenants directly and exploring how they might be better supported via in-mall marketing initiatives, landlords can focus on creating more conducive conditions for sustained occupancy over pre-terminated leases and vacant spaces, says Tay.
As landlords contend with rental growth, occupancy rates, and footfall, retailers struggle with challenges such as rising operating costs, manpower shortages, and e-commerce competition.
Diving deeper into the recent trajectory of retail rents, research compiled by CBRE showed that prime rents increased by 0.5% q-o-q in 1Q2026, which matched the increase lodged in 4Q2025. The positive movement in prime retail rents is characterised by robust demand for prime floors and subdued interest for other floors, according to Tricia Song, head of research, Singapore and Southeast Asia, at CBRE.
With new retail supply over the next three years set to remain below historical averages, CBRE forecasts prime retail rents could grow by 1 – 2% in 2026.
The Middle East conflict may intensify headwinds
Despite a handful of retail closures that have made headlines in recent months, overall leasing momentum remained strong in Q12026. The latest real estate data released by URA on April 24 indicated that in 1Q2026, the islandwide retail market saw positive net absorption of about 86,000 sq ft, extending 4Q2025’s positive net absorption of about 366,000 sq ft.
The space take-up was led primarily by Food & Beverage (F&B) operators such as Tutto, Jumboree, and Molly Te, fashion brands, and other lifestyle concepts. CBRE says that while leasing activity has remained consistent, the sharp spike in cessations reiterates that a challenging environment persists for the retail sector.
