Singapore malls could face retail apocalypse like US counterparts

But food and beverage stores are taking up more mall space.

As e-commerce grows in Singapore and in Southeast Asia, investors fear their malls could follow a downfall like with the US, thinktank Urban Land Institute (ULI) and PwC revealed.

In their "Emerging Trends in Real Estate Asia Pacific 2018" report, the projected compounded total return of Singapore's suburban and prime retail assets for 2017 to 2022 played around 5%. This is lower than Sydney's 8% and Kuala Lumpur's 7.5%, some of the highest in the Asia Pacific region.

Moreover, the share of internet retailing in Singapore was also seen to rise to 9% of total retail value in 2021.

However, several takes revealed polarising opinions on retail property in the region.

The report said Singapore's poor market performance could be more of a reflection of lower inbound tourism compared to a marked shift to e-commerce.

The country's retail industry remains immature.

"There are inefficiencies in the way Asian malls are built and operated that create potential for savvier operators to differentiate their own products," the report said. "Offerings tend to be fresher. Beyond that, many big facilities are being reinvented in an effort to protect themselves from e-commerce challenges."

The report cited a fund manager that renovated their mall in Singapore. They boosted food and beverage, which is "pretty immune" to e-commerce to have 20-30% of floor space.

"That’s what you want to have—services that people can’t get online,” the unnamed fund manager said.

Whilst these types of tenants generally pay lower rents than fashion outlets, ULI and PwC said these seem to hit the bottom line that's acceptable to most landlords.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia