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Singapore’s retail environment continues to be challenging in 3Q, and weaker-than-expected economic growth and the soft job market is likely to affect spending for the rest of the year, Cushman & Wakefield.
This is also reflected by consumer confidence in Singapore, which has dived to its lowest since June 2009 based on figures from the Mastercard Index of Consumer Confidence for 1H2016.
Although 2016 tourist arrivals have grown 7.2% and 6.7% y-o-y in June and July respectively, the real-estate services company notes that retail sales continued to stay in the doldrums, falling 3.2% and 2.3% y-o-y in June and July.
Big ticket items saw significant declines in sales figures, and even retail sales of the food and beverage (F&B) segment registered a 7.4% y-o-y fall in July 2016.
The numbers are a testament that tourists are spending less and the Great Singapore Sales (GSS) has lost its lustre, says Christine Li, Cushman & Wakefield’s director of research, Singapore.
To make things worse, average prime rents in Orchard Road have declined by 1.2% q-o-q. However, average prime rents for suburban areas have only declined by 0.5% q-o-q.
This is because take-up rates at newly completed retail mall projects – such as Punggol New Town’s Waterway Point and Compass One in Sengkang, both under Frasers Centrepoint Trust – was “relatively strong”, according to Li, who believes Compass One is expected to enjoy strong footfall from the steady population growth in the neighbourhood.
“Vacancies in retail malls could worsen with the ongoing retail business consolidations arising from higher operating costs and competition from e-commerce,” she adds.
On the subject of retail business consolidations, Li refers to the recent phenomenon of what she views as landlords taking a “more proactive approach to engage and excite shoppers by promoting lifestyle retail”.
For example, Funan mall (CapitaLand Mall Trust) is due to reopen in 2019 as an “experiential hub” that features a rock-climbing facility and indoor cycling path among other sports facilities, while Cathay Cineleisure Orchard has introduced an indoor trampoline park to its premises.
The upcoming OUE Downtown (OUE Commercial REIT), which is due for completion in early 2017, is said to bring in a “social kitchen” and an “auto deli area” where lockers and a casual dining area will enhance customer experience, points out Li.
Other malls undergoing redevelopment works include Park Mall (Suntec REIT) and Century Square, with the latter being expected to undergo Asset Enhancement Initiative (AEI) next year.
Units of Frasers Centrepoint Trust, CapitaLand Mall Trust, OUE Commercial REIT and Suntec REIT closed at $2.13, $2.13, 70 cents and $1.75 respectively.
http://fifthperson.com/shoppers-wallets-stay-shut-in-3q16-and-possibly-beyond/
This is also reflected by consumer confidence in Singapore, which has dived to its lowest since June 2009 based on figures from the Mastercard Index of Consumer Confidence for 1H2016.
Although 2016 tourist arrivals have grown 7.2% and 6.7% y-o-y in June and July respectively, the real-estate services company notes that retail sales continued to stay in the doldrums, falling 3.2% and 2.3% y-o-y in June and July.
Big ticket items saw significant declines in sales figures, and even retail sales of the food and beverage (F&B) segment registered a 7.4% y-o-y fall in July 2016.
The numbers are a testament that tourists are spending less and the Great Singapore Sales (GSS) has lost its lustre, says Christine Li, Cushman & Wakefield’s director of research, Singapore.
To make things worse, average prime rents in Orchard Road have declined by 1.2% q-o-q. However, average prime rents for suburban areas have only declined by 0.5% q-o-q.
This is because take-up rates at newly completed retail mall projects – such as Punggol New Town’s Waterway Point and Compass One in Sengkang, both under Frasers Centrepoint Trust – was “relatively strong”, according to Li, who believes Compass One is expected to enjoy strong footfall from the steady population growth in the neighbourhood.
“Vacancies in retail malls could worsen with the ongoing retail business consolidations arising from higher operating costs and competition from e-commerce,” she adds.
On the subject of retail business consolidations, Li refers to the recent phenomenon of what she views as landlords taking a “more proactive approach to engage and excite shoppers by promoting lifestyle retail”.
For example, Funan mall (CapitaLand Mall Trust) is due to reopen in 2019 as an “experiential hub” that features a rock-climbing facility and indoor cycling path among other sports facilities, while Cathay Cineleisure Orchard has introduced an indoor trampoline park to its premises.
The upcoming OUE Downtown (OUE Commercial REIT), which is due for completion in early 2017, is said to bring in a “social kitchen” and an “auto deli area” where lockers and a casual dining area will enhance customer experience, points out Li.
Other malls undergoing redevelopment works include Park Mall (Suntec REIT) and Century Square, with the latter being expected to undergo Asset Enhancement Initiative (AEI) next year.
Units of Frasers Centrepoint Trust, CapitaLand Mall Trust, OUE Commercial REIT and Suntec REIT closed at $2.13, $2.13, 70 cents and $1.75 respectively.
http://fifthperson.com/shoppers-wallets-stay-shut-in-3q16-and-possibly-beyond/
