Retail rental levels, especially in prime areas, are still skyrocketing despite the slower economy. This has left industry players wondering if retailers who committed to lease shop spaces at very pricey levels have over-extended themselves.
'The top retail rents of about $80 per sq ft (psf), which were announced recently by Ion Orchard, are a cause for concern,' said Mr Colin Tan, head of research and consultancy at Chesterton International. 'How do you ensure a reasonable profit?'
According to Jones Lang Lasalle, average retail rents are about 27 per cent higher than they were 10 years ago. They stood at an average of $41.25 psf a month in the first quarter of this year, compared to about $32.50 psf a month in the first quarter of 1998.
