Steady retail demand with high streets gaining more traction among retailers

• In Q1 2025, the net absorption in malls was limited to 0.05 million sq ft. The Suburbs submarket accounted for most of the leasing activity at approximately 86%. Jewellery and fashion and apparel brands were the most active in leasing through the quarter.
• Retailer interest heavily favoured high streets this quarter, accounting for 66% of total retailer activity. This trend underscores an increasing attraction to these areas, likely due to their prime locations that enable convenient accessibility for shoppers.

No new supply in the quarter

• No new malls were added in the quarter, and the overall retail stock remained steady at approximately 7.1 million sq ft.
• Citywide mall vacancy decreased by 80 bps q-o-q, reflecting continued strong demand in the retail market.

Rents remained mostly stable across all premium assets

• Rents in existing malls were largely stable, with minor changes observed across existing Grade A malls.
• While premium malls were steady in terms of rents, prominent high streets saw rents rise, driven by increased traction in these retail hubs. Capital values remained stable as well.

Outlook: Strong demand for retail space is anticipated to continue

• By end-2025, 0.25 million sq ft of new retail space is anticipated, with projected net absorption of 0.36 million sq ft. The 2025–2029 period forecasts 5.2 million sq ft of mall supply. Key developments include Lulu Mall and Forum Mall in OMR.
• Existing malls are expected to see rent increases. However, citywide average rents will likely be driven by the fact that most new developments are in the suburbs, where incoming rents for new completions are likely to be lower compared to central clusters.