The managers of Suntec City are optimistic that the mixed-use development will be well-positioned for its next phase of growth once it completes a makeover that will strengthen the fashion, entertainment and food & beverage offerings at its mall.
This will create a better mix of tenants that will attract more foot traffic and help the development unlock new business value through higher rental income, said Ms Susan Sim, Deputy Chief Executive of ARA Trust Management (Suntec) Limited, which manages the Suntec Real Estate Investment Trust.
“Part of it is about rightsizing — we’ve cut down the space for a huge hypermarket to open up more areas for popular fashion brands, which we couldn’t accommodate in the past,” Ms Sim said.
“We are also doubling our space for F&B to create a more diverse offering that will cater to more than just the office catchment we have.”
Ms Sim was speaking to TODAY ahead of an event later today marking the completion of the first phase of the makeover process. The S$410 million project was announced in 2011 just as the 17-year-old development seemed to be falling out of shoppers’ favour: Analysts have said Suntec is less accessible to pedestrian and tourism traffic compared to newer developments in the Orchard Road shopping belt, and the annual road closures for the Formula 1 Grand Prix have created further challenges.
But Suntec City — which comprises a mall and five office towers, and is linked to the nearby Suntec Singapore International Convention and Exhibition Centre — was by no means struggling, Ms Sim said, and the makeover, which will be completed next year, was not a rescue plan.
“Suntec City’s office and mall occupancy rate is always above 95 per cent, our mall attracts more than two million foot traffic per month, and the convention centre brings in seven million visitors per year,” she said.
“So the Asset Enhancement Initiative (AEI) was not announced to fix any problems. It’s more a self-push to modernise our hardware and ensure our market relevance. And as our tenant mix grows stronger, we will further enhance our existing competitive edge — which is the prime location that we have in Marina Bay, and a strong accessibility that two MRT stations give us,” Ms Sim said.
The makeover may reward Suntec City at least in the near term as the “newness” of the revamped mall will allow it to extract higher rents, said Mr Alan Cheong, Savills’ senior director for research and consultancy.
“But a retail operator is unlikely to fail anyway in Singapore, where the business is under-supplied as our population continues to grow. That’s why over the past decade the retail space per capita has shrunk from 8 square feet to about 7 square feet,” Mr Cheong said.
“So Suntec City will have no problem with occupancy and rental. But there will be a lot of uncertainties ahead on whether it can sustain its foot traffic in the long term as new malls continue to emerge in the area.”
Meanwhile, to tap the potential appeal arising from the revamp, new shops and restaurants have already opened near the famous Fountain of Wealth.
One of them is Ya Kun, which was relocated as part of the makeover process. Group director for branding and market development Jesher Loi is bullish about Suntec’s prospects.
“We are excited to be part of the enhancement project,” he told TODAY. “Already the lunch crowd here is quite substantial, so we look forward to serving the office catchment during weekdays and a growing number of weekend shoppers that the revamped mall is bound to attract.”
Source : Today – 12 Sep 2013