Super-prime demand pushes Asia Pacific rents higher

Retailers are forced to adopt new strategies and eye alternative assets.

Asia Pacific retail rents rose 3.1% this year, according to Cushman & Wakefield, driven by strong demand for super-prime spaces amid limited supply. With luxury retailers and changing consumer behavior fueling the trend, competition is reshaping strategies across the sector.

“85% of our customers are still shopping in malls, which continues to fuel demand for mall and super prime spaces,” said Sona Aggarwal, Head of Retail, Asia Pacific, Cushman & Wakefield. “Luxury retailers have the bandwidth and the pockets to keep wanting the right adjacencies on Orchard Road.”

Yet, pressure from rising rents and limited vacancies is forcing developers and retailers to diversify their approach. “Secondary malls in local catchments within Singapore, for example, a Japanese Mall. Those spaces are becoming really important, and we're seeing the rental uptake in those spaces, which corroborates this theory,” Aggarwal explained.

Retailers are responding with agile strategies to secure presence in key markets. “While luxury brands still want Orchard Road presence or prime real estate presence… they are starting to develop alternative strategies like pop up stores in secondary malls to maintain brand awareness, to drive customer uptake,” Aggarwal said.

She pointed to examples such as Coach’s shop house concept with a café in Kyong Siak, as well as tech-enabled brands like Decathlon opening smaller footprints to support click-and-collect services.

Emerging retail sectors are also reshaping demand. “Almost 50% of the uptake in first half of 2025 was F&B outlets,” Aggarwal said, citing the rise of experiential dining, Asian cuisines, lifestyle-driven retailers like Don Donki, and the fast-growing athleisure segment. Mixed-use developments are also becoming important, with consumers seeking spaces where they can “eat, live, work, play.”

Looking ahead, cross-border expansion remains a focus, but challenges loom. “Retailers are always looking to expand,” Aggarwal said. “But what I would caution… the risk of getting it wrong is pretty high now, higher than it was before, given the cost pressures and economic headwinds.”