Singapore’s retail market is showing a clear two-speed pattern. According to Savills Research, islandwide vacancy rose by 0.3 percentage points (ppt) quarter-on-quarter (QoQ) to 7.1% in Q2/2025, driven by weaker demand in the Central Region. Here, vacancy climbed 0.6 ppts QoQ to 8.2%, with the Downtown Core and Rest of Central Area each seeing net reductions of about 75,000 sq ft in occupied space.

In contrast, the Suburban Area where there was stable footfall and spending on essential goods and services, the vacancy rate held steady at 5.2%.

Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, said, “Margins for many retailers are falling or even turning negative, with weaker demand particularly evident in the Central Region. However, suburban malls with strong connectivity and large local catchments are proving more resilient, managing to sustain tenant demand despite the broader headwinds. Looking ahead, the limited supply pipeline over the next two years will provide some support for occupancy and rents, but the performance gap between prime, well-located assets and weaker malls is likely to widen.”

Retail sales (excluding motor vehicles) weakened in May and June, with fewer than half of the categories recording year-on-year gains. Food & beverage sales ended the quarter with a 0.4% decline compared to a year ago, as restaurant turnover eased.

While market sentiment remains muted, Savills’ basket of retail properties showed a slight uplift in rents in Q2/2025. Orchard Area malls saw a 0.5% QoQ increase, while suburban malls recorded a 0.4% QoQ rise. Savills Singapore projects rents in both segments to grow by up to 2% for 2025.

The supply of new retail space is set to moderate, with 2025 completions estimated at around 570,000 sq ft of net lettable area (NLA), down from 679,000 sq ft in 2024. Supply will taper further to below 380,000 sq ft annually in 2026 and 2027, before larger-scale projects such as the Marina Bay Sands expansion are completed towards the end of the decade (2028 to 2029). (See Table 1)

Sulian Tan-Wijaya, Executive Director, Retail & Lifestyle, Savills Singapore said, “Whilst the performance between prime and less prime developments may continue to diverge and despite soft retail sales, the limited supply of retail spaces in the city centre, including Orchard Road, has kept occupancy rates at healthy levels.”

Savills expects the limited pipeline to lend short-term support to occupancy and rents, particularly in well-located malls. However, landlords of weaker-performing assets may still need to offer shorter leases or rental incentives to keep less prime units occupied.

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