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The retail industry in Singapore is struggling with high rent, while sales remain flat as gleaned from the latest financial results of Singapore’s biggest mall landlord, reported Nikkei Asian Review.
CapitaLand Mall Trust, which owns 15 shopping centres here, announced that tenant sales per square foot slipped 0.2 percent in H1 2018 on an annual basis, while shopper traffic across its properties dipped 2.2 percent.
But some of its malls recorded rental income growth in Q2 2018, raising its gross revenue for the said three-month period by 1.6 percent to $171.4 million.
At the same time, average retail rents here edged up 0.2 percent quarter-on-quarter, revealed CBRE, adding that this marked the second consecutive quarter of rental gains after a long period of falling or flattish rents.
Excluding cars, retail sales increased by 1.8 percent in 2017 following three straight years of decline as the country’s gross domestic product (GDP) posted its highest gain since 2014.
However, momentum seems to be waning, with economic growth falling below analysts’ forecasts in Q2 2018. Nevertheless, the latest data showed that retail sales increased 2.2 percent in May on an annual basis versus a 0.9 percent uptick in April.
Aside from being impacted by the growing popularity of e-commerce, retailers in Singapore are also facing stiff competition from retailers in neighbouring Malaysia, particularly in Johor, where prices of goods and services are about 50 percent cheaper.
“Everything is cheaper in Johor Bahru and it’s a quick $1 bus ride for senior citizens from Singapore… My friends normally buy medicine, groceries, and we also enjoy the great cheap food, have a haircut and so on,” said 64-year-old writer Leong Sze Hian, who shops there once a month.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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