Is the retail property market on its way to redemption?
In January, retail sales value jumped 4.1%YoY to $33.9b.
Despite a 4.1% YoY jump in retail sales value in January, Knight Frank said redemption for the retail property market might only happen after March.
In a report, the analyst said the fifth wave will likely peak in March and will only coo down in the months after.
Once the fifth wave recedes, Knight Frank believes consumer sentiment will rebound, whilst retailers and restaurant operators will gradually regain confidence.
Meanwhile, measures have been put in place by the government to support the retail market amidst the ongoing fifth wave including the disbursement of $10,000 in consumption vouchers to over 6.3 million residents.
This move, however, won’t be able to effectively boost the total retail sales and stimulate the city’s economy, according to Knight Frank.
“Based on the previous experience, people will use the consumption vouchers mainly for daily necessities rather than on discretionary spending,” Knight Frank said.
The proposed rent enforcement moratorium in the 2022/23 Budget on rental deferment for tenants in specific sectors might also aggravate the poor market environment in the real property market, since it may put pressure on both tenants and landlords.
Knight Frank said retailers and landlords negotiating rental relief measures on their own would better suit the “situation of each individual leasing deal and maintain the city’s non-intervention market principle.”