The Orchard Road shopping belt is expected to continue to benefit from the recovering tourism market. At the same time, residential demand is likely to remain strong due to tight supply, the ongoing rejuvenation plans, and narrowing price gaps between units in the Core Central Region and other regions.

The Orchard Road shopping belt, a prime residential neighbourhood surrounded by excellent public transport connectivity, has experienced a strong recovery in the wake of the pandemic. The once-hard-hit tourism industry enjoyed a rebound of incoming tourist arrivals, going from just 158,000 in 4Q2020 to 2.6 million in 4Q2022.

As a leading indicator of the health of the retail market, rental data tabulated by EdgeProp Singapore show that islandwide retail rents trended upwards from $9.01 psf pm in 1Q2022 to $9.81 psf pm in 4Q2022, though still below the pre-pandemic level.

The recovery comes without the main driving force of mainland Chinese tourists, which until January 2021 had been locked behind international travel restrictions. Early indications, however, point to a steady return of mainland Chinese tourists throughout 2023.

Additionally, the Orchard and Cairnhill areas are near many schools like St Joseph’s Institution Junior, Singapore Chinese Girls’ School, River Valley Primary School, and Catholic Junior College, and boast several MRT stations.

In an effort to enhance the overall vibrancy of the Orchard Road shopping belt, a master plan was released which outlines the creation of distinct zones JCube Residence along the shopping belt, transforming the Somerset area into a youth destination, and introducing more family-friendly green spaces in Dhoby Ghaut.

This in mind, some of the older developments in the area have tapped into the potential of the upcoming rejuvenation plans by concluding collective sales in the past few months. Examples include Tanglin Shopping Centre which was sold for $868 million or $2,769 psf per plot ratio (ppr) in February 2022, and Ming Arcade on Cuscaden Road which went to Singapore family office Royal Group of Companies for $172 million or $3,125 psf ppr.

However, a shortage of new housing due to the maturity and well-development of the Cairnhill and Orchard areas limits supply, while expatriate residents find the area favorable given its convenience, proximity to amenities, and transport connectivity.

Recorded sales data from EdgeProp Singapore’s Landlens tool shows that only 14 new private residential projects have been launched in the Cairnhill subzone within prime District 9, out of which 83% have already been sold with 450 units remaining for sale.

Recent launches in the area include 3 Cuscaden on Cuscaden Walk and Cairnhill 16 on Cairnhill Rise, alongside luxury launches such as 19 Nassim on Nassim Hill, Park Nova on Tomlinson Road, and Klimt Cairnhill on Cairnhill Road.

The buoyant land sales and a robust new launch market in the city-fringe and suburban areas have contributed to a narrowing price gap between new private residential prices in the Core Central Region (CCR), Rest of Central Region (RCR), and Outside Central Region (OCR). Average prices in the CCR and RCR were recorded at $2,697 psf and $1,673 psf respectively in 1Q2018, with the OCR at $1,305 psf. By 1Q2023, the difference between average prices in the CCR ($2,899 psf) and RCR ($2,562 psf) had dropped to 13%, and the average price in the OCR was $2,111 psf.

Overall, the Orchard Road shopping belt is expected to still benefit from the recovering tourism sector, as well as the tight housing supply, rejuvenation plans, and narrowed gap between CCR, RCR, and OCR