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CapitaLand Mall Trust
Annual Report 2015
Overview
Sustainability
Business
Review
Portfolio
Details
Corporate
Governance &
Transparency
De s p i t e t h e s ubdu e d ma r ke t c o nd i t i o n s ,
the fundamentals for long-term ongoing rental growth
in Singapore remain in place. Underpinned by the
growth in Singapore’s population, incomes and tourist
numbers, retail sales are likely to continue to grow in
the long term. Demand for retail space continues to
increase as new retailers enter the market and new
supply of floor space is absorbed. Singapore remains
a favoured location for retailers trying to enter the
Asian market.
Conclusions
The past 10 years have seen some quite extreme
economic conditions globally. The GFC, a post-GFC
boom, the Euro crisis and China’s slowdown have
all created an economic environment for Singapore
that has been dif ficult to navigate. Economic
conditions currently remain quite weak, with retail
sales, retail occupancy and rents falling, and workers
increasingly hard to source. For mall owners,
these conditions create an environment where
the quality of mall management becomes crucial.
Failure to support tenants, optimise tenant mix,
maintain marketing efforts and ensure appropriate
capital expenditure is deployed will create significant
risk for mall owners.
Rental Growth Outlook
(%)
Sources: URA and Urbis.
2012
2.2
2012
0.7
2013
0.4
2013
0.1
2014
2.0
2014
2.2
2015
-1.0
2015
-1.0
2016
2016
-0.5
2017
1.5
2017
1.0
2018
2.0
2018
1.5
Suburban
Orchard Road
Forecast
Forecast
0.0
Financials &
Additional
Information
Conversely, mall owners and managers who are
strong operators have an opportunity to further
cement their market position as operators who help
their tenants and malls successfully navigate this
difficult time. Evidence suggests that many mall
owners are responding actively, with a number of malls
currently being refurbished or redeveloped. Examples
include Bukit Panjang Plaza (CMT) and Compass
Point (M&G Real Estate).
The threat posed by e-commerce, and the rise
of online retailing is a hot topic in Singapore.
While concerns remain (particularly in many Asian
markets where online retailing remains in a strong
growth phase), worldwide mall owners are beginning
to realise that online retailing is not going to spell the
end of the physical retail mall. Both retailers and mall
owners are responding to the threat, and indeed
embracing the opportunities that online retailing offers.
Evidence from other countries suggests that there is
a limit to the share of sales that ultimately get directed
online, and as Singapore approaches this limit the
ongoing impact of online retailing will diminish.
