Prime shopping space in the central business district (CBD) has shrunk.
As at end of September 2012, retail space – excluding that for drinking, eating and entertainment – has fallen by about 3 per cent, according to data by the Urban Redevelopment Authority (URA) which was analysed by real estate firm Colliers International.
Prints, an upmarket stationery retailer, has been looking to expand in the Orchard Road area. Its outlet at Chevron house has attracted a lot of corporate orders and bulk purchases from surrounding offices.
But its business is still lagging behind its other outlet at Ion Orchard. With space four times larger Chevron’s, Ion brings in 20 per cent more business.
The company said expanding into the Orchard Road shopping belt may also open up new opportunities. Its third outlet at CityLink Mall sees the least business.
Prints’ operation manager, Lim Fung Leng, said: “We’re still looking at areas like Orchard and VivoCity because we would like to expand into the international market and we would like to attract more tourists and those area has a lot people from different walks of life it will get more exposure for our products.”
More retail space in the CBD area has been converted for Food and Beverage purposes, according to a research by real estate agency Colliers International.
As a result, the available space for other retail use has become tighter.
Colliers International’s research head, Chia Siew Chuin, said: “Why you see more retail space or rather more F&B space is because a lot of developers and owners of retail malls know that F&B outlets are actually magnets for people. Magnets for human traffic to be locked inside their retail malls. So gone are the days when you only see 15 per cent to 20 per cent F&B space. You can see as high as 40 or 50 per cent of your total space is F&B or leisure space.”
Other analysts said prime space for F&B outlets may typically command lower rents.
Savills Singapore’s research head Alan Cheong said: “F&B commands lower rentals on a dollar-psf, gross lettable area because you have a lot of non-revenue generating activities like your kitchen and in some instances you have to provide washroom compared to retail where every single space is for revenue generating purpose.”
Except for the building housing the former DBS headquarters that will be redeveloped to include a sizeable retail space spanning 170,000 square feet, analysts don’t see much office space being converted to retail space in the CBD.
In the next five to 10 years, new condominiums will create the need for more retail space.
But analysts said these would be F&B outlets and retail stores providing basic necessities like pharmacies, mini-grocers and supermarkets for affluent residents.
Source : Channel NewsAsia – 7 Jan 2013