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Most property consultants envisage some rental growth for retail space this year, with the momentum fuelled chiefly by prime properties. But a number of factors should keep any significant rental hikes at bay.

For one, the tenant profile mix has been heading towards more big-format activity-based retail concepts; operators in these categories aren’t prime candidates for high rentals.

Moreover, the onslaught on brick-and-mortar stores from e-commerce/online retailing has not abated. The labour crunch also continues to plague retailers here.

Shopper dollars also continue to leak overseas, given the penchant of Singaporeans for shopping overseas. There is also fear in some quarters that retail spending by tourists in Singapore may take a hit from the alignment of luxury goods prices in China to global standards.

As for the resident population here, it would not be an exaggeration to say that other than necessity shopping at supermarkets, and unless there are extremely attractive sales promotions, most folks visit malls to eat, window shop or catch up with friends.

In such a climate, retailers here would be hard put to stomach any sizeable rental hikes.

Prime retail malls in Singapore – whether in the Orchard Road strip or in the suburbs – are mostly held by strong landlords or real estate investment trusts (Reits), and the balance of power tends to be in their favour. In the pursuit of higher returns to shareholders, these landlords would have reason to find some cheer in the latest URA data. But the retailing scene remains tough, and landlords will have to balance their bottomlines with ensuring their tenants can first survive.