Are Singaporeans still shopping at the malls?
Singapore malls are looking at repositioning Itself, to outpace online shopping. A few of the nation’s biggest mall operators has reported falling rents and rising vacancies, forcing its owners to reposition and redefine what it means to be a shopping mall. The decreasing revenue is similar to other parts of the world, including in other Asian countries and the United States.
Fortunately for the mall operators, online shopping in Singapore is not picking up as much as expected, even after Amazon’s debut of its prime service here mid last year; and they’re happy for it to remain that way.
The malls are now redefining mall shopping experience to include services like yoga studios, boxing gyms and climbing walls – and expanding their food and beverage options – to make sure people come for the dining and fun and, hopefully, stay for some shopping.
Centres around the world may have tried similar tactics in recent years, unfortunately with no solid success results. The Singapore landlords however, are willing to gamble on the new strategy. After all, this tiny island republic has often been ‘touted’ jokingly as having listed shopping as their national sport, thus giving the industry an advantage and a fairer chance to succeed the current obstacle.
Good news is that there are early signs the gambit is working – at least in terms of driving up traffic.
At VivoCity, the island’s largest shopping centre, number of visitors increase by 3.1 per cent in the six months through Sept 30 from a year earlier, as owner Mapletree Commercial Trust added an arcade complete with a full-sized bumper car ring. Yet, actual shopping fell slightly.
In other malls, visitors can spend a day taking a cooking class or participate in a complimentary yoga session. At CapitaLand’s Clarke Quay, you’ll be able to sip margaritas while playing a round of indoor mini golf. CapitaLand’s Westgate mall and its soon-to-open revamped Funan mall will feature an ABC Cooking Studio, where people can sign up for bread-baking lessons or classes on how to make wagashi, traditional Japanese sweets.
CapitaLand Mall Trust, which has a portfolio of 15 centres, reported that shopper traffic declined 1.8 per cent in the nine months ended September from a year ago while, tenants’ sales per square foot climbed 0.5 per cent over the same period.
“While the current market share of online sales is small, its pace of growth will only speed up as tomorrow’s consumers enter the market,” CapitaLand chief executive officer Lee Chee Koon said earlier in September at a ceremony to mark the new Funan centre.
“Brick-and-mortar businesses must go beyond passively selling products and services to generating quality retail experiences and emotional connections.”
In Asia, Singapore vies with Hong Kong for the most retail space per capita.
Amazon’s Prime launched in Singapore in July last year almost immediately faced delivery delays – a costly snafu in a market where the nearest store or mall is just minutes away for most people.
Malls that cannot effectively incorporate activity-based tenants risk falling behind, both in terms of footfall and retail rents, according to Cushman & Wakefield. Millennials, in particular, are a target of non-shopping ventures.
But while the plethora of new activities have helped drive traffic, it has failed to translate into real money. Mall rents have dropped 18 per cent over the past year and vacancies rose in the quarter through September, to 7.6 per cent, Urban Redevelopment Authority data show.
And with an estimated 803,000 square feet of retail space coming online in the next 15 months, rents will remain under pressure, according to Ms Tay Huey Ying, head of research for Singapore at JLL.
“Until brick-and-mortar retail stores manage to convert foot traffic into in-store purchases, rentals are expected to remain subdued,” she said.
Source: StraitsTimes
Photo: singapore-guide.com