Mall landlords and tenants reimagine space use

/ EdgeProp
January 3, 2019 8:30 AM SGT
With e-commerce changing consumer behaviour, even retailers and mall owners on Orchard Road are looking at ways to convert footfall into sales. There has been a restructuring of offerings in shopping malls, with an increased focus on activity-based and F&B tenants, observes June Chua, Cushman & Wakefield (C&W) head of leasing, commercial/industrial.
Current trends in the retail scene include pop-ups, multi-label concepts and the introduction of co-working spaces, continues Chua, “all of which strive to keep the mall experience fresh for shoppers”. Landlords and retailers are expected to invest more in technology to “seamlessly integrate the online and offline experience” for consumers, she adds.
Prime Orchard Road malls tracked by C&W saw retail rents edge up 0.9% in the first nine months of this year, while rents of suburban malls climbed 2.9% over the same period. “The indication is that well-managed malls with superior locations have already come out of the woods and are able to attract the bulk of footfall and command higher rents and enjoy full or near-full occupancy,” says Chua.
A view of prime Orchard Road — Singapore’s most famous shopping strip (Picture: Samuel Isaac Chua/The Edge Singapore)
Today, prime monthly retail rents in the Central Region range from $30 to $50 psf, while rents in the suburban areas are $25 to $32 psf, says Lee Nai Jia, Knight Frank senior director and head of research.
However, overall retail rents in the Central Region are expected to decline further, ending the year with a 2% to 3% fall. “We believe retail rents will bottom out in 2019,” C&W’s Chua says. “Sentiment on the economy and job market is still [optimistic] and could have a positive spillover effect on consumer confidence and spending.”
New supply of 1.7 million sq ft
Next year, about 1.7 million sq ft of retail space is expected to come on stream, says Knight Frank. This is 60% more than the one million that entered the market in 2018. The bulk of the new retail space in 2019 is from Jewel Changi Airport (close to 579,103 sq ft), which is said to be 90% leased ahead of its opening. Funan will add about 324,000 sq ft of retail space, while PLQ Mall...