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BARELY a year after moving in, tenants at the newly refurbished Shaw Centre shopping mall are already up in arms over the mall's deserted state. At least eight tenants have come together to petition the mall's management to promote the place and boost occupancy rates.
Chief among the grouses listed in the three tenant petitions sent between April and May are the low occupancy rates and footfall, the lack of a cohesive concept in the retail tenant mix and the dearth of mall-led advertising and promotional initiatives.
When The Business Times visited the place last week, only a few shoppers were spotted along its corridors.
Around half the mall's units were still behind hoardings. On the fourth floor, only two units were tenanted; a third was undergoing heavy construction. The air-conditioning on that side of the mall was off, and sawdust coated one of its running escalators.
Stacy Louis, manager of watch retailer TW Steel Watches, said: "If the mall is fully tenanted and we're not doing well, then there is no one to blame but ourselves, but when the mall is still half empty, then the landlords have to take part of the blame too."
Tenants now pay between S$14 and S$21 per square foot a month, as well as a percentage of their gross turnover and a portion of rent for advertising and promotions to Shaw Foundation, which owns and manages the five-storey retail annexe near the busy junction of Orchard and Scotts roads.
Tenants said that the mall's management had talked about holding a grand opening ceremony last September, but postponed it to December, and then to the Chinese New Year. To date, the official opening ceremony has yet to materialise,
they said.The eateries in the mall, such as the Les Amis Group's cluster of restaurants, the decades-old steakhouse The Ship and a newly opened outlet of Japanese ramen bar Ippudo, draw a steady stream of diners, but few are enticed to linger in the building after their meals. Tenants have put this down to a lack of signage and store directories.
The mall's still-vacant Orchard Road-facing units are a further deterrent for passers-by to wander in, said tenants.
Some have taken to running their own marketing initiatives.
Thomas Choong of Chinese bistro Xi Yan Shaw said that he spends S$2,000 to S$3,000 a month on his own marketing drive - about the amount he spends for a whole year for his Craig Road restaurant. "I decided to open my second outlet in a mall because I thought there would be natural traffic, otherwise I might as well have gone to another destination venue."
A beauty salon owner acknowledged that these are tough times for retailers everywhere, but said this was where communication between landlord and tenants was key.
"It seems like once we signed on the leases, we were left to sink or swim," he said, disclosing that after having sunk more than S$100,000 into renovating his unit, he was now barely making enough to cover the monthly rent. Moving out is not an option because a penalty is imposed for ending his three-year lease early.
Other tenants see the potential behind promoting the standalone shops - such as aromatherapy bar Nila and noodle eatery I Want My Noodle - as the mall's draw; it is what sets it apart from the high-street retail chains populating most other Orchard Road malls.
Dr Choong said: "Shaw Centre has the unique charm of housing Lido, one of Singapore's oldest cinemas, right in Orchard Road, but if the management doesn't use that to our advantage, people will see it as an forsaken icon."
Contacted by The Business Times, a Shaw Centre spokesman said that the landlord has been working closely with tenants since February to address their concerns. More signs and tenants' advertisements have gone up, and tenants have been allowed to rent Shaw Lido's foyer for roadshows and other marketing efforts.
Last month, the mall's management began screening video advertisements on Shaw Centre with the movie trailers at Lido and other Shaw theatres, said the spokesman.
This is not being funded by the tenants' advertising fund and amounts to some 270 screenings a day. Some tenants have since reported an increase in footfall following these efforts.
Additionally, rental rebates of between five and 20 per cent for periods of up to six months were offered to tenants between March and May, when the first two petitions were issued; the third petition from tenants, requesting a further 50 per cent rent rebate for a year, was received three weeks ago.
The spokesman said that a soft launch had been organised last November with the Christmas promotions, but that the landlord "would prefer" to get 80 to 90 per cent of tenants on board and for the main tenants to be open before holding an official launch.
He added that, with the Raffles Medical Group and United Overseas Bank moving in this month, the mall's occupancy rate will hit 75 per cent.
Pointing to the current manpower crunch and weak retail sentiment discouraging retailers from expanding to new locations - a trend affecting all of Singapore's retail clusters - he added that the management would continue to track the retail market and assess the effectiveness of its current marketing efforts.
Beyond the ongoing Great Singapore Sale promotions, the management will roll out a loyalty programme for shoppers and add more outdoor media and signage, it said.
The current problems amount to deja vu for Shaw Centre. In 2011, before the place underwent its major revamp, a separate set of former tenants had complained that more than 40 per cent of the units in the mall were standing vacant, and that long-held management plans for redevelopment were taking too long to materialise.
Savills Singapore senior director of retail and lifestyle Sulian Tan-Wijaya said: "The retail market will always have ups and downs. It's what retailers and landlords do about it that makes them successful. If a landlord is nimble and flexible enough to see what works and what doesn't for the mall, they must be prepared to change the trade mix or at least allow the tenant to review their own merchandise mix while the lease is ongoing.
"Having a proactive leasing plan to ensure healthy occupancy is also critical. If prime shop space is left vacant for months, the mall is not giving a strong signal about its success. Shoppers will start forming their own views too."
Singapore Polytechnic marketing retail lecturer Amos Tan said that tenants have to ensure that the shopping mall in which they are taking a lease aligns with their target segment of customers.
Shaw Centre's layout is such that anchor tenants such as Isetan department store and Shaw Lido occupy most of the frontage, obscuring the shops at the back, he said; those units would thus suit businesses with an established clientele, rather than those hoping for walk-in traffic.
"If potential tenants have done their recce and choose to take up a unit, then it is at their own discretion," he said.
- See more at: http://business.asiaone.com/news/re...shoppers-tenants-unhappy#sthash.DTN4Wxpi.dpuf
