CapitaLand Integrated Commercial Trust - Annual Report 2021

Demand & Vacancy Although retail sales and footfall have been gaining momentum with the easing of restrictions and resumption of shopping mall operations, there were still traces of store closures. For example, luxury multi-brand boutique, Pedder on Scotts closed its 20,000 sq ft store in Orchard. Department store BHG announced its closure of both Jurong Point and Clementi Mall outlets, and drew to a close its pop- up collaborative concept with Raffles City Singapore, One Assembly, after a year of successful partnership. Isetan also closed its outlet at Parkway Parade at the end of January 2022. The uncertainty on tourism and work from home measures will continue to put pressure on the retail market. Retailers have remained cautious on future expansion. However, lower rents and stronger local consumption were significant factors encouraging retailers to actively look for new leasing opportunities. Against this backdrop, a healthy number of new openings and expansions was observed in the F&B sector. They were mainly located in resilient locations and micro-markets which are positioned for future recovery. And while MAJOR FUTURE RETAIL SUPPLY 2022: (0.4 million sq ft) 2023: (0.4 million sq ft) 2024: (0.4 million sq ft) Orchard Road • Boulevard 88: 32,000 sq ft N.A. • Faber House: 20,000 sq ft Downtown Core • Guoco Midtown: 24,300 sq ft • IOI Central: 30,000 sq ft • Odeon Towers 25,000 sq ft N.A. Rest of Central Region • Club Street Retail: 33,300 sq ft • Wilkie Edge: 21,200 sq ft N.A. N.A. Fringe • Shaw Plaza: 67,500 sq ft • Le Meridien Singapore: 20,500 sq ft • Grantral Mall: 67,500 sq ft • One Holland Village: 117,000sq ft • The Woodleigh Mall: 208,000 sq ft • Labrador Villa Road: 28,300 sq ft Outside Central Region • Sengkang Grand Mall: 109,000 sq ft • Komo Shoppes: 27,000 sq ft • Dairy Farm Residences: 32,300 sq ft • Pasir Ris 8: 288,100 sq ft • T2 Airport: 67,000 sq ft Source: CBRE Singapore, 4Q 2021 the recovery of the retail market was still capped by restrictions on social gatherings and work from home arrangements, leasing activity continued to be stable in 4Q 2021. Throughout the pandemic, government restrictions have caused uncertainty to the F&B segment and landlords realised that they are unable to solely rely on F&B to attract foot traffic. As such, landlords were seen refreshing their tenant mix by onboarding new tenants into their malls. On top of that, local fashion brands made a strong showing in 4Q 2021, as brands such as The Editor’s Market, Benjamin Barker, and Minor Miracles increased their physical presence along prime Orchard Road to complement their online platforms. In all, the islandwide retail net absorption for 2021 was recorded at 1.1 million sq ft. Islandwide vacancy rate of retail market declined y-o-y by 0.7 percentage points to 8.1% in 4Q 2021, while the vacancy rate in Orchard Road decreased y-o-y by 0.5 percentage points to 10.9%. In addition, Suburban vacancy rate fell for the sixth straight quarter to 4.5% in 4Q 2021, from 4.7% in 3Q 2021. Annual Report 2021 103 Independent Market Review