Retail sector is also expected to bottom out in early 2021.
The retail sales index (RSI), excluding motor vehicles, dipped by 2.4% YoY to 98 in November 2020, with retail sales performance having improved in the period due to large-scale sales events 11.11 and Black Friday on digital platforms, according to property consultant Knight Frank.
According to the research, recent slowdown in rental declines of prime retail spaces also point to a potential bottoming out of rents by early 2021 and any rental reduction during the year is expected to be about 5%, barring any lockdowns.
Knight Frank Singapore head of retail Ethan Hsu noted that the new retail will focus on placemaking strategies to create engaging and interactive experiences in order to draw customers and encourage visiting physical and online stores.
“Retailers that can curate such experiences to better connect with their customers across multiple touchpoints will see greater growth in 2021 as shoppers gravitate towards new and exciting concepts that cannot be replicated elsewhere,” Hsu said.
Many brick-and-mortar stores have recently started going virtual, with establishments such as Isetan and Metro selling their products on e-commerce platforms, as well as BHG setting up its own shopping site.
The increased online sales in the same period accounted for about 16.7%, or $516.4m, of total retail sales during the month.
Meanwhile, island-wide prime retail rents declined moderately in Q4, largely due to rental decreases of retail stores located in the central region. Prime retail spaces of suburban malls registered the lowest rental decline of 7.7% YoY.