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The decline in tourist spending, growth of online retail, and more Singaporeans shopping overseas led to slower retail sales growth in Singapore during the past three years, with island-wide retail rents dropping four percent last year, revealed a JLL report.
In 2014, around 1.44 million Singapore residents shopped online, up 30 percent from 2012, according to the InfoComm Development Authority (IDA) as cited by JLL in a press release dated 4 February. The significant increase came from shoppers above 35 years old, as those using portable devices to access the internet from this group soared 50 percent in two years.
Aside from movie and airline tickets, Singapore residents are increasingly purchasing footwear, clothing, groceries and household and electronic goods online, showed a JLL study on the impact of multi-channel retail on Singapore retail space demand.
The number of shoppers buying computer equipment and groceries soared by around 70 percent over the last two years.
Meanwhile, Accenture’s retail strategy consulting group Javelin expects the Internet to influence 75 percent of non-supermarket chain store sales by 2020, an increase from 2010’s 44 percent.
JLL noted that these trends have played out to some extent in Singapore.
In pro-actively managed suburban malls, for instance, food and beverage, fashion, beauty and health trades have taken up more space in the last seven years, while department stores, supermarkets and houseware shops have reduced in size.
And while overall retail sales did not grow last year, tenant sales in well managed suburban malls grew by two to five percent year-on-year, with gifts and toys posting the strongest growth.
Looking ahead, Regina Lim, JLL national director of advisory & research for Capital Markets, expect to see more Singapore residents using multiple channels to shop in the next three years.
“Online purchases of non-experiential goods such as groceries, household and electronic goods are likely to grow exponentially. Suburban malls may cut back on space for these trades while increasing the allocation to clothing/footwear, health/beauty, F&B and gifts and toys,” she said.
“Well-managed suburban malls could do well in 2016, gaining market share in a challenging market. By proactively managing the tenant mix and attracting more higher-priced brands, suburban retail mall rents could remain healthy and grow.”
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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