Gen Z, Gen Alpha lift Orchard Road retail demand

Luxury and international brands continue to seek flagship retail spaces.

Gen Z and Gen Alpha consumers are supporting demand at Orchard Road’s prime retail malls despite a year-on-year decline in tourist arrivals in the second quarter of 2026, Savills Singapore said.

Orchard Area vacancy rose slightly to 7.2% in Q2 from 7.1% in Q1, whilst average monthly rents increased 0.3% quarter-on-quarter to S$23.70 per sq ft.

Demand remained strongest amongst luxury brands, international retailers and experiential concepts seeking flagship and larger-format stores along Orchard Road and in the prime city centre.

Luxury, beauty, wellness and experiential brands continued to seek prominent locations to strengthen brand visibility and customer engagement. Average passing rents for Orchard Road malls are expected to rise by up to 2% in 2026.

About 309,000 sq ft of net lettable area is due for completion this year, below the five-year average of 474,000 sq ft. New supply is expected to fall to 241,000 sq ft in 2027, about half the historical average.

Limited supply has encouraged landlords to pursue asset enhancement and redevelopment projects, including the revamps of Plaza Singapura and NEX and the redevelopment of HarbourFront Centre.

Other malls are refreshing their tenant mixes. Parkway Parade recently added Stuff’d, Ramen Hitoyoshi Lobster & Grill, Tim Hortons, Gyukatsu Kyoto Katsugyu and Supergreen, with Shake Shack expected to open later this year.

Savills also noted continued investor interest in suburban retail assets, including i12 Katong and White Sands. In the Central Region, limited trophy assets supported capital values, highlighted by the acquisition of Paragon.

“With Gen Z and Gen A increasingly driving retail spending trends, we note that fashion brands like Brandy Melville and Subdued, which target this young segment of female customers are trading well,” Sulian Tan-Wijaya, executive director, deputy head of private wealth / head of retail at Savills, said.

She said fashion, beauty, and cafe retailers could benefit from Gen Z and Gen Alpha spending if their brand narratives and offerings resonate with these consumers.

“Although tourist arrivals declined in the quarter, demand for Orchard Road retail space may be buttressed by concepts targeting Generation Z and Alpha consumers,” Alan Cheong, executive director, research & consultancy, Savills Singapore, added.

Singapore’s retail property market is expected to remain resilient through 2026, with healthy consumer spending, a firm labour market and limited new supply supporting leasing demand.

Average passing rents across Orchard Road and suburban malls are projected to rise by up to 2% this year.