Friend, not foe: how landlords can enable tenant success

WHILE Singapore’s economy has demonstrated resilience relative to many global markets, the pressures faced by businesses here are real and increasingly structural. How firms respond to these pressures matters, not just for individual balance sheets, but also for broader economic performance over the medium to long term.

In retail, growth prospects remain cautiously optimistic, with market analyst RHB maintaining a 2 per cent growth in retail sales in its forecast for 2026.

Yet, business and consumer sentiment are expected to stay conservative through 2026, tempering momentum across consumer-facing sectors.

For retailers, this is not a cyclical slowdown that can simply be waited out, but a period that demands innovative recalibration.

Against this backdrop, an important shift needs to take place: The relationship between landlords and tenants should evolve from a transactional arrangement to a symbiotic partnership.

The economic reality facing tenants

For many retailers, financial pressure extends well beyond rents. Industry data consistently shows that manpower costs, utilities and operating expenses account for a significant and growing share of the cost base. Wages, energy costs and compliance requirements continue to rise.

At the same time, consumer behaviour is shifting in ways that challenge traditional retail models. Gen Z shoppers are discovering brands and shopping through social platforms rather than bricks-and-mortar stores. Demand is growing for immersive, experience-led concepts that justify physical visits.

Meanwhile, inflation has made consumers more cautious and price-sensitive, forcing retailers to balance value with differentiation.

These dynamics leave little room for error. Retailers must adapt quickly by rethinking formats, optimising space usage, and investing in capabilities despite limited financial headroom. This is where the role of landlords becomes increasingly consequential.

Landlords as enablers, not just space providers

Landlords have traditionally been viewed primarily as asset owners and rent collectors; but in today’s environment, that model is insufficient.

The industry now demands partnership, not passive oversight. This is reinforced by the Code of Conduct for Leasing of Retail Premises in Singapore, which mandates fair, transparent and balanced negotiations between landlords and tenants for all qualifying retail leases.

Importantly, the code of conduct requires landlords to provide data based on the gross turnover rent formula, a structure that aligns incentives by sharing risks and rewards.

Given the wealth of data that landlords often possess, ranging from shopper demographics to consumer behaviour patterns, dwell times and tenant-mix performance, landlords can become active partners in enabling retailers to make better decisions.

By harnessing data-driven insights and working closely with tenants, landlords can help curate retail experiences that more effectively respond to and capture evolving consumer demands. This may involve collaborating on experiential concepts, supporting short-term activations, or rethinking how space is allocated across a mall or precinct.

Flexible leasing structures are another important tool.

As retailers test new formats or adjust their store footprint, such flexibility lets them innovate without taking on excessive risk. Done thoughtfully, such arrangements support tenant sustainability while protecting the long-term value of retail assets. Flexibility could be exercised through pop-up stores or shorter-term leases, for instance.

Landlords are also introducing targeted incentive programmes – from marketing support to capability-building initiatives – to help tenants navigate a more complex operating environment. This includes extensive omnichannel marketing to drive footfall and shoppers’ spending through campaigns, as well as maintaining a robust digital rewards programme designed to foster shopper loyalty.

Driving efficiency through future-ready solutions

Cost efficiency is also emerging as a shared priority. With utilities and operating expenses rising, landlords are well-placed to support tenants through investments in energy-efficient and sustainable infrastructure.

Building-level initiatives, such as smarter energy management systems, more efficient cooling and lighting as well as sustainability-led retrofits, can deliver tangible savings while advancing broader environmental goals.

Such measures also enhance asset resilience and attractiveness, as sustainability considerations become more central to investor and consumer decision-making.

The key then is value alignment. When landlords and tenants work together on operational efficiency, the gains are mutual and enduring.

Towards a more resilient retail ecosystem

The retail sector’s resilience will depend less on individual actors and more on the strength of the ecosystem as a whole. A more tenant-centric partnership model supports this.

Landlord-tenant partnerships are not about short-term concessions, but about building adaptive capacity for a more uncertain world. In a market such as Singapore that is stable but not immune to global headwinds, this collaborative approach offers a practical pathway to sustaining growth, productivity and competitiveness over the long term.

As economic pressures persist, the question is how quickly and effectively the landlord-tenant relationship can evolve. Those who are ahead of the curve will be better positioned to weather volatility and shape the future of retail in Singapore.

The writer is head of asset operations at Lendlease