CapitaLand Integrated Commercial Trust - Annual Report 2021

0.6% y-o-y decrease in November 2021, on the back of the easing of dine-in restrictions from two to five fully vaccinated persons. The highest growth was observed in food caterers (47.1%), due to low base effect in the preceding year and higher demand for food deliveries. Restaurants, fast food outlets and cafes, food courts & other eating places registered an increase of 7.7%, 0.8% and 4.5% y-o-y respectively in December 2021. With the shift of consumer shopping habits to online purchase of products and services, the overall proportion of online retail trade (excluding motor vehicles) increased by 3.6 percentage points y-o-y to 16.3% 3 in December 2021. Shopper’s Consumption and Behavioral Trends The retail sector continued to face curve balls thrown by the COVID-19 pandemic despite some signs of recovery in retail activities in 2021. The STB launched the “Made with Passion” initiative to promote a vibrant ecosystem amongst stakeholders in the retail industry, to help tackle challenges faced by retailers and thrust the industry forward. Throughout the pandemic, the retail sector has evolved to provide a seamless shopping experience across multiple offline and online channels to meet the rising customer sophistication. Shopping malls have been leveraging on omnichannel retail platforms to complement brick and mortar outlets to increase consumer touchpoints and drive sales. Omnichannel retail infrastructures enable synced inventory management that provides consumers with “Click-and-Collect” options when they browse products online, and to collect their purchased products in the store should they prefer a physical shopping experience. With the paradigm shift towards the ‘phygital’ model, the line between offline and online store has blurred and retailers would have to bring online convenience to stores and bring the store experience digital. Continuous revisions of F&B restrictions have brought about uncertainties and landlords are unable to rely solely on F&B establishments to draw traffic. Landlords started to adopt flexibility in refreshing its tenant mix by accepting tenants who are well positioned to attract footfall. For example, CapitaLand unveiled that it would host La Prairie’s, a swiss luxury skincare, first flagship boutique in ION Orchard from September 2021. In addition, CapitaLand continued to enhance its retail ecosystem by partnering with DBS to bring greater convenience 3 Excluding motor vehicles. 4 Source: Australian Bureau of Statistics. 5 Source: Ministry of Trade, Industry, and Energy - South Korea. to consumers. Other initiatives shown by landlords include shorter leases, with the option to renew, and capital expenditure through provisions such as fixtures, power upgrades and advertising. Increasingly, consumers are more aware of retailers’ sustainable footprints and would prefer to engage with brands that create value and commit to environmental sustainability. As growing consciousness about the environment continues to empower consumers’ purchase decisions, having a sustainability framework is imperative to the recovery from the pandemic and for retailers to stay relevant in the long term. The road ahead to a “new normal” and the experiences from the past two years have increased the expectations of experiential retail amongst Singapore consumers. Retailers have to inject freshness and adopt strong placemaking to provide shoppers with irreplaceable experiential elements that they cannot get elsewhere. New experiential tenants that opened in 2021 included baking studios (Whisk Baking Studio), educational facilities (Kenko Training Hub), drone centres (DJI) and gaming studios (Esports Experience Centre). 2021 also saw some new-to-market brands and new flagship concepts. For instance, Lady M opened its sixth boutique, the World’s first and only champagne bar concept by Lady M, in ION Orchard. The Editor’s Market opened its first flagship store that spans 8,000 square feet (sq ft) and hosts the brand’s first F&B concept at Takashimaya. Eggslut made its Southeast Asian debut at Scotts Square. Orchard Road continues to stand firm its position as a prominent shopping district with flagship stores, new entrants and international brands. The shift in lifestyle will continue to bring forth new expectations, demands and consumer trends in 2022 and beyond. Online Retail Sales in the Asia Pacific Markets Asia Pacific consumers continued to embrace online retailing in 2021. The proportion of online shopping activity in Australia was 10.5% in December 2021 4 , a 1.4 percentage point increase y-o-y from December 2020. With high internet penetration, South Korea’s online transactions accounted for 28.1% proportion of total retail sales in 2Q 2021. For the full year of 2021 5 , online retail sales grew 15.7% y-o-y over 2020. In China, online consumption remained vibrant, with CapitaLand Integrated Commercial Trust 100 Independent Market Review