Rental Reversion is much stronger for Suburban than Downtown Then tenants would be locked into rising rental obligations, when their core business isn’t improving. The only problem I can foresee is if the COVID situation doesn’t clear up. While landlords get committed occupancy (instead of leaving it vacant), and they also get built in upside going forward. It’s a win-win because tenants get a lower upfront rent and gives them time to stabilize their business. They are likely giving tenants a lower first year rent, which then increases over time. This means that landlords are using this as a carrot to sign leases. Where it gets interesting, is the details: The Year 1 Rents are lower than the Average Rents So this means that the new retail leases are being signed at a rental that is lower than the previous lease. Rental reversion for retail leases is still on the decline.įor those newer to real estate, rental reversion is the difference between (1) the rent for new leases and (2) the expired leases. Singapore Retail Market Rental Reversion still declining I’ll keep the takeaways at a high level to trends in Singapore commercial real estate, and not so much on CapitaLand Integrated Commercial Trust specifically.
#Key takeaways from chapter 3 and 4 one up on wall street update#
Do you want more of such posts, or do you want changes to the format – just let me know in the comments!ģ Key Takeaways from CICT’s 3Q 2021 Business Update (CapitaLand Integrated Commercial Trust) I’ve never done a post like this before so I’d love to hear your feedback. I figured I’d share my key takeaways here, and hopefully you’ll find it useful. So I was reading the CapitaLand Integrated Commercial Trust 3Q 2021 Business Update this morning.Īnd man, the slide deck was an absolute treasure trove of information on the Singapore commercial real estate scene – both retail and office.
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