CapitaLand Investment guns for more third-party management contracts for malls

INDOOR activities and sports programmes will take centre stage at Kallang Wave Mall and the retail areas at the Singapore Sports Hub, as CapitaLand Investment (CLI) takes over the management of the space from Monday (Apr 1). 

CLI has been making progress in growing its management of malls for third parties and is gunning for further growth in this area.

The group also inked a third-party management contract for an iconic retail asset in Singapore, said Chris Chong, CLI’s chief executive officer of retail and workspace in Singapore and Malaysia. 

Speaking to The Business Times, he said: “Depending on the discussion, the new project will have a strong angle in terms of tourism.”

It will be attractive to well-heeled shoppers and those seeking lifestyle and entertainment options, he added.

More details on the contract, which was inked in the first quarter of 2024, will be shared at a later date. 

To enhance the retail experiences at the Sports Hub and Kallang Wave Mall, CLI aims to bring in flagship stores with a strong focus on lifestyle, sports and wellness. 

“Locals must feel attracted to come… but at the same time, being a world-class destination, attracting tourists is also important,” said Chong.

“Besides bouldering, there will also be other concepts where you can enjoy indoor activities – and that has to be one of the unique selling points of this location.”

Pop-up events and sports programmes could be in the pipeline.

At Funan, for instance, design studio Chokmah organises craft workshops and Under Armour has a running club.

Chong added: “You see people doing activities and having fun… these are examples where we can go beyond retail.”

Since 2016, CapitaLand has developed a third-party management contract model for malls as part of its asset-light strategy to grow its assets under management and increase recurring income.

During its FY2023 financial results briefing in February, CLI said it secured four 10-year contracts for retail assets in Changsha and Ningbo in China.

“Going into third-party management helps us to generate fee income, and this is one of the areas we’ve identified as having a very strong value proposition,” Chong said. 

“We already have the necessary connections and the necessary expertise, so we do see it as a scalable business… We are able to sign a lot of the contracts in a short time without increasing our resources exponentially.”

Together with building owners, CLI is involved in curating tenants, introducing new concepts and managing malls based on their location and positioning.

The real estate investment manager is also exploring third-party contracts in other countries, especially in South-east Asia. 

Capturing the tourism dollar as the retail industry bounces back from the pandemic is a key priority.

Visitor arrivals dropped during the pandemic, but have recovered to 13.6 million for the whole of 2023, while tourism receipts are estimated to reach between S$24.5 billion and S$26 billion. 

“When the pandemic hit, it really showed us we do need these tourism receipts,” Chong said.

As Chinese tourists return to Singapore, more Chinese brands have been internationalising, and Singapore is one of the first markets they are venturing into, he noted.

For instance, Chinese fashion brand Neiwai opened its first store in Singapore at Raffles City in July 2023. 

“We serve some of these international customers. When they come, they will still shop at the concept (stores) they are familiar with.” 

CLI will also be partnering the Singapore Tourism Board for its Singapore Wanderland game and bringing its virtual experience CapitaVerse onto online gaming platform Roblox.

From April to October this year, gameplayers can win prizes worth more than S$100,000 that they can redeem at CapitaLand malls.

Chong said: “If you only target people who are coming to your malls, you are not increasing the base of potential shoppers. Reaching out to the younger generation and tourists is as important to us.

“Post Covid-19, we see a lot more interest in services and products which have a very strong association with experiences.”

Space for events

Shopping mall atriums are no longer just a destination for sales, but are being transformed into event spaces which bring the community together. 

In January, Bukit Panjang Plaza played host to an international basketball tournament organised by Jumpshot Singapore, which featured professional teams from countries including Singapore, Thailand and Malaysia.

Last December, CLI organised a mass unboxing event in partnership with toymaker Pop Mart at Funan. The event was more than six times oversubscribed. 

At CQ @ Clarke Quay, which is in its final stages of asset enhancement works, shoppers who visit FairPrice Finest will not only be able to buy and pick up groceries, but can enjoy Singapore-themed cocktails and freshly cooked beef cuts and seafood on the spot. 

Chong said: “These are new retail experiences we want to bring to the market, and that is where we are pushing the boundaries.”

Last year was a “good year” for luxury brands due to pent-up demand, but they will still have to refresh their offerings, he said. Spending continues to be more discretionary for the beauty, watches and jewellery segments. 

He said: “A lot of spa, wellness, massage and aesthetic services are going strong and this applies whether it’s in the downtown or suburban (malls).”

While Chong remains optimistic about Singapore’s retail outlook, he stressed it was important to keep a close eye on the kind of concepts CLI brings in, to stay relevant to shoppers. 

“Whether markets are up or down, I think that’s when shoppers will keep going back.”