Research from CBRE’s Retail Hotspots 2015 Report revealed that food and beverage outlets made up the bulk of new entrants in Asia Pacific retail markets last year. Some 33 percent of new brands that opened branches in the region fell under the coffee and restaurant category showing consumers may have food on the brain.
This total is up 11 percent from CBRE’s 2014 survey. However, it’s not just F&B outlets opening up across Asia Pacific. The number of new retailers in the region continued to rise in 2015 with more than 500 new brands opening stores last year. Strong consumer demand for retail-tainment continued to support the growth in the number of new F&B entries according to CBRE’s findings. This trend was especially evident in Singapore.
“The proportion of F&B in the Singapore retail malls has increased and now makes up about an average of 25 percent to 30 percent,” Letty Lee, Director Retail Services, CBRE explained. “There is no denying that for every F&B operator that signs a lease, there are a few who exit. But what is important is that Singapore continues to attract a steady stream of F&B operators in keeping with the city’s discerning palate.”
CBRE also noted that with rents expected to decline in places like Singapore, there will be opportunities for international retailers to enter these markets. The first quarter saw rents for Singapore’s prime Orchard Road as well as the suburbs decline and it is forecasted that prime rent throughout the country will drop by two percent this year.
“The tough leasing climate has prompted some landlords to further adjust rental expectations, especially in areas where competition is stiff and foot traffic relatively poor. To save costs, more established retailers have opted to relocate out of prime corridors to secondary corridors,” Desmond Sim, head of CBRE Research, Singapore & South East Asia noted. “Freeing up prime space has allowed landlords to pursue retailers seeking flagship space. Brands, including F&B retailers are still looking to introduce experiential or “retail-tainment” concepts and are seeking larger floor plates.”
