travel that have accompanied it. Retail spending per visit has also declined slightly in recent years
in line with subdued global economic conditions. In 2014, Urbis estimates tourists’ retail sales to have
accounted for 14.9% of total retail sales in Singapore.
From 2014 to 2019, international visitor numbers are forecast to grow at around 3.5% (approximately
in line with Singapore Tourism Board’s projections)
1
, or 566,000 visitors per annum, representing a
substantial moderation in growth relative to that over the previous decade. The slowing in forecast
growth is not only due to an expected moderation in the global tourism growth rate but also
continuing softer economic conditions in many of Singapore’s key source markets. Tourists’ retail
sales are expected to grow slightly as a proportion of total retail sales in Singapore through to 2019,
reaching 15.5%. It should be noted that the impact of fluctuating tourists’ retail sales will be more
prominent for malls located in the city centre, especially those along Orchard Road.
RETAIL SALES
Growth of retail sales has closely tracked both the local economy, as well as the fortunes of the global
economy. Overall retail sales in Singapore have exhibited relatively high variability. However, the
negative impact of this has been counterbalanced by a relatively healthy level of average long-term
growth. Between 2003 and 2013, retail sales growth averaged 4.9% per annum, including a high of
8.9% in 2007 and a low of -1.7% in 2009.
2014 has been another low point for retail sales growth, with total sales estimated to have declined
0.2%. Retail price inflation is estimated to have been negligible at 0.1%, tourists’ retail sales were
down significantly and the slow economic growth has impacted consumers’ confidence.
We do, however, expect a moderate rebound in retail sales in 2015 and beyond in line with improved
economic conditions and a rebound in tourism growth. We expect that retail sales will grow at
approximately 3.3% per annum over the 2015-2019 forecast period.
RETAIL SUPPLY
Our forecast supply of retail space for Singapore takes into account forecast annual completions of
shopping malls together with an allowance for other retail floor space, and also making allowance for
some obsolescence. We have assumed an increase of 1.5% (equivalent to 270,000 sq ft) per annum
for other retail floor space. The rate of obsolescence is assumed at 0.5% per annum in the case of
shopping malls and 0.8% per annum for other retail floor space.
On this basis, we estimate the total retail net lettable area (NLA) for Singapore was 63.5 million sq
ft as at 31 December 2014, and this is expected to increase to 68.4 million sq ft by end-2019. This
represents average annual growth of around 1.5% per annum and indicates the proportion of total
retail floor space occupied by shopping malls will increase from its current level of approximately
45.8% to approximately 48.0% by end-2019.
1 Tourism Industry Conference 2013 – Discussion Paper, Singapore Tourism Board
Independent Retail Market Overview
80 | CapitaMall Trust Annual Report 2014
