New Retail Supply Set to Halve to 241,000 sq ft in 2027 as Landlords Race to Redevelop
Savills Singapore shares that Orchard Road's prime retail malls are drawing spending from Generation Z and Generation Alpha consumers, even as tourist arrivals declined year-on-year (YoY) in the second quarter of 2026. Vacancy in the Orchard Area held largely stable at 7.2% in Q2 2026, compared with 7.1% in Q1, supported by sustained demand and a constrained supply pipeline.
Leasing demand remained concentrated among luxury brands, international retailers and experiential concepts, particularly along Orchard Road and within the prime city centre, where occupiers continued to seek flagship stores and larger-format spaces to strengthen brand presence and enhance customer engagement. According to Savills' basket of retail properties, average monthly rents for prime Orchard Area malls edged up 0.3% quarter-on-quarter (QoQ) to S$23.70 per sq ft in Q2 2026, extending modest gains from the previous quarter.
Leasing demand in the prime retail segment also remains supported by luxury, beauty, wellness and experiential brands seeking prominent flagship locations that strengthen brand visibility and customer engagement. Average passing rents for Orchard Road malls are projected to increase by up to 2% in 2026.
According to Savills' estimates, approximately 309,000 sq ft of net lettable area (NLA) is scheduled for completion in 2026, below the five-year average of 474,000 sq ft. New supply is expected to moderate further to 241,000 sq ft in 2027, about half the historical average. Against this backdrop of limited new supply, landlords have stepped up asset enhancement and redevelopment initiatives to enhance asset performance and adapt to evolving consumer preferences, including the ongoing revamps of Plaza Singapura and NEX, together with the redevelopment of HarbourFront Centre.
Even among malls not undergoing major redevelopment, landlords continue to refresh their tenant mix with new concepts to remain relevant and drive shopper traffic. For example, Parkway Parade recently welcomed tenants such as Stuff’d, Ramen Hitoyoshi Lobster & Grill, Tim Hortons, Gyukatsu Kyoto Katsugyu and Supergreen, with brands including Shake Shack expected to open later this year. The suburban retail segment continued to attract strong investor interest, reflected in the transactions of i12 Katong and White Sands, both brokered by Savills’s Investment Sales & Capital Markets team, while in the Central Region, the limited availability of trophy assets supported capital values, as demonstrated by the acquisition of Paragon.
Sulian Tan-Wijaya, Executive Director, Deputy Head of Private Wealth / Head of Retail, said “With Gen Z and Gen A increasingly driving retail spending trends, we note that fashion brands like Brandy Melville and Subdued, which target this young segment of female customers are trading well.
Retailers, particularly those in fashion and beauty as well as cafes, stand to benefit if their brand narrative and offerings resonate with this increasingly influential group of consumers.”
Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore, said: “Although tourist arrivals declined in the quarter, demand for Orchard Road retail space may be buttressed by concepts targeting Generation Z and Alpha consumers.”
Singapore's retail property market is expected to remain resilient through the rest of 2026, supported by healthy consumer spending and a firm labour market. Leasing demand is expected to remain healthy amid a limited near-term supply pipeline, particularly within established retail clusters, with well-located malls offering strong tenant curation, asset quality and experiential offerings likely to outperform. Overall, the retail market outlook remains positive but measured, with average passing rents for both Orchard Road and suburban malls projected to increase by up to 2% in 2026.