More than a decade’s supply of retail space is under construction in Singapore.
This is putting pressure on retailers in existing malls and forcing their owners to refurbish as the competition heats up.
Construction is well underway at shopping malls in suburban Jurong.
The two malls there and another in Punggol will house one million square feet of commercial space.
Nationwide, 3.6 million square feet of retail space is expected to be completed over the next four years.
Nicholas Mak, Executive Director of Research & Consultancy, SLP International, said: “This is a substantial amount which is equivalent to roughly about 10 to 11 years of supply based on the last 10 years average.”
Strategically located in areas of high population growth, the new space may not create an oversupply but it may have contributed to a frenzy of makeovers of existing malls.
And left some retailers feeling left behind.
Elvis, Owner, Pizzaroni, CityVibe tenant, said: “I hope the management will do some marketing event to catch the people coming here. The people here have less spending power but if you do some interesting things to get the customer in, they will be willing to spend here.”
Experts say continual renewal is especially necessary at smaller malls that are under-performing.
Donald Han, Special Advisor, HSR Property, said: “In some cases it has fairly weak retail asset managers looking after the portfolio and of course, in some cases, it is lacking of the desired tenant mix.”
While some retailers may have to suspend operations for a while, refurbishment can benefit them in the long run – especially with competition rising from all sides.
Mr Han said: “Singaporeans like to travel and when they travel, they spend their strong Singapore dollar in European countries, in US so that’s one leakage. The other potential leakage out of Singapore retail market system is the growing popularity among e-commerce which is your E-retail and also mobile retail.”
Singapore’s retail landscape is changing, not only the ground.
Source : Channel NewsAsia – 2 Feb 2012