Retail landlords must reinvent the shopping mall to thrive in new normal
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IN recent years, retail landlords have been working to tweak their tenant mix by bringing in more activities and food & beverage (F&B) tenants, but the pandemic has shown that landlords have not been moving nearly swiftly enough to reinvent the shopping mall.
This has been a challenging year for retail as the circuit breaker and social distancing measures took their toll on footfall and spending. Headwinds were exacerbated by the weaker economy as well as border closures, given that tourists are said to account for some 30 per cent of sales at Singapore's iconic Orchard Road shopping belt. Hence, it is the suburban malls that are leading the recovery, thanks in no small part to the prevalence of employees working from home.
According to Knight Frank, retail rents will fall by 10-15 per cent year on year in 2020, although the real estate firm sees a bottoming out by year-end or early 2021 and retail rents easing by a slower drop of 5-10 per cent in 2021 as the pandemic is contained.
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