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CapitaLand Mall Trust
Annual Report 2015
Overview
Sustainability
Business
Review
Portfolio
Details
Corporate
Governance &
Transparency
This is par ticularly true for the retail industr y.
The retail sector has been persistently hit by critical
labour shortages due to the limitations placed on hiring
foreign workers as well as the reluctance on the part
of Singapore residents to pursue a career in the retail
sector. To aid the retail sector with labour shortage,
a new manpower plan was launched in December 2015
by the Ministry of Trade and Industry to help increase
employee capability and productivity over the next
five years.
We expect some loosening of migration controls over
the next few years, but growth is unlikely to return to
historical highs. We expect growth in the non-resident
population will average around 2.8% or 49,000 people
per annum over the next five years. This compares
with non-resident average population growth of 4.6%
or 65,500 people per annum over the past five years.
The resident population is likely to grow slower than
the non-resident population, but at a more stable
rate. We estimate that it will grow at 0.7% or 28,000
people per annum over the next five years, marginally
higher than the past five years. This will result in
total population increasing by 1.4% per annum
(77,000 people per annum), reaching 5.9 million
by 2020.
Tourism
In a period of global economic uncertainty, one area
of impressive growth has been the Asian tourism
market. The ongoing growth of the middle class
throughout Asia, and particularly China, has led to
a huge increase in the amount of international travel
that has occurred. Across the ASEAN countries,
total international visitorship has grown by more than
8.0% per annum.
Singapore has the most sophisticated tourism market
in ASEAN, and attracts a disproportionately high share
of this market (approximately 15.0%). This is a product
of Singapore’s tourism infrastructure (including Changi
Airpor t), its central location, and Government’s
ongoing drive to support the growth of this market.
The Singapore Tourism Board has been very active in
supporting the future growth in the market.
Over the long term, Singapore has therefore
experienced very healthy growth in international
tourism numbers. Since the drop in 2009 (during the
GFC), tourism numbers have increased by almost
1.1 million per annum. This is a very strong result,
considering that visitorship actually fell in 2014 (-3.0%).
In recent years, this growth has been driven by a wide
range of countries, particularly Hong Kong, China,
South Korea, Taiwan and India. This strong growth
has resulted in tourists accounting for a high 16.0% of
total retail sales in Singapore.
Notwithstanding relatively soft growth currently,
Urbis expects to see an increase of around 480,000
tourists per annum over the nex t f ive years,
with growth picking up post-2017. This forecast
represents a substantial moderation in growth relative
to that over the previous decade 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.
Retail Sales
Singapore’s retail market is currently experiencing
one of its most difficult periods in recent history.
Over the past three years, retail sales have grown by
an average of 0.1% per annum, compared to 5.1%
over the past seven years which included the GFC.
We have already discussed many reasons for this –
low population growth, slow economic growth and
poor tourism growth.
2015 has been another weak year for retail sales
growth, with sales falling by 0.3%, following a drop of
0.4% in 2014. This performance reflects many of the
underlying issues currently impacting the Singapore’s
economy, in particular a lack of inflation in consumer
goods. There has been almost no difference between
real and nominal (inflated) growth in retail sales over
the past few years.
We expect 2016 to be another relatively difficult
year, with only a marginal improvement in retail sales
growth. Singapore’s economic performance in 2016
is unlikely to significantly outperform 2015, meaning
income and employment growth will remain soft.
However, we remain more optimistic over the medium
and longer term, and expect retail sales to grow at
an average of between 3.0% and 3.5% per annum
between 2017 and 2020.
Financials &
Additional
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