Suburban Malls Go Up Against Downtown Counterparts
 

25 Apr 2011
CommercialGuru.com.sg


In spite of the 11.6 million visitors recorded in Singapore last year, about half of the 31 retail attractions registered a decline in the number of visitors by as much as 28 percent, according to a survey conducted by the Association of Singapore Attractions.

“The uneven performance of tourist destinations in Singapore is also probably true for our downtown malls,” said Colin Tan, Head of Research and Consultancy at Chesterton Suntec International.

“Some are doing very well, while others are fast losing their allure. Aside from the booming suburban shopping centres, it appears that the rest of the industry is going through a shake-out. And it appears that no downtown mall is spared, even the seemingly-successful new ones.”

The landlords of suburban malls have discovered the winning formula to lure crowds. They start by finding a site, preferably adjacent or atop an MRT station, then including a food court, cineplex and a vast supermarket. Any other anchor tenant or attraction is considered an extra point.

Mr. Tan stressed that what works for suburban malls may not be true for downtown malls.

“Two of the more successful downtown malls in my opinion — Takashimaya and Centrepoint — are not the closest to the MRT stations in their locations. And you can certainly pick malls which disappoint although they are the nearest to the exit points of the train stations,” Mr. Tan said.

In the past, downtown malls drew the rich and a group of local shoppers from all places in Singapore. They have lost a major percentage of their domestic market to suburban malls.

Luckily, Singapore’s integrated resorts have bridged the gap, attracting many more visitors to the country.

Though there are no detailed statistics of the recent arrivals in Singapore, most are said to be regular visitors, which may explain the fall or fluctuations in attendance for some tourist spots.

Downtown malls need to know that finding a market niche is no longer enough. The stability of tenants is just as vital as the current profile of visitor arrivals.

“So maximising rentals today – by quickly replacing existing tenants with higher paying ones – may be working wonders for suburban malls but it is counter-productive to the longer term success of the downtown mall,” said Mr. Tan.