The Swift lift that Singapore malls need

SINGAPORE’S Taylor Swift coup may have stirred Bad Blood among its neighbours, but there’s no denying that the pop superstar’s six nights in this town brought huge benefits.  

One economist who crunched the numbers put the Swift lift at S$300 million to S$400 million, or 0.2 percentage points of GDP, to Singapore’s economy in the first quarter. All this, for the mere S$20 million or so (reportedly) that was handed out to secure the “only in Singapore” billing for the Eras tour. 

There is much Tay-hay to be made when the sun shines. 300,000 concert tickets sold = a very large number of wealthy foreigners landing here, paying higher-than-peak rates for their hotel stays and splashing out around town.

Singapore has long relied on the fame of its shopping street to draw visitors, but the tourist belt needs to really up its game. Visitors from the region are coming from home markets - like Thailand - that now house far bigger and grander retail precincts also targeting the high-net-worth spender. 

Even as buildings in the area embark on rejuvenation, the scale of Singapore’s bigger malls falls well short of leading malls in the region.   

In The Level Ground, Leslie Yee writes that for Orchard Road malls to do well, Singapore’s ability to draw major events to its shores will be critical. The giant magnet of a big-name act or Formula One-scale event is more powerful than the limited pull of Orchard Road’s best attractions. 

The competition is stiffening. Goh Ruoxue reports that more cities across the region are pumping in huge amounts to amp up their appeal and pull the concert crowd. Venues boasting mass capacity and stunning features - including retractable roofs and swappable pitches - are set to open their doors, mostly between this year and 2030.

Outside of Singapore’s prime retail belt, local malls with strong suburban catchments continue to draw traffic and interest. The Kuok Group’s Allgreen Properties sealed a deal to buy The Seletar Mall from Cuscaden Peak and United Engineers for S$550 million. 

Allgreen owns Tanglin Mall as well as Great World City in the River Valley area, where two state land sites are being offered for residential projects. Analysts anticipate firm interest in the smaller River Valley Green project, good for about 380 housing units, that will come up across the road from Great World City. Bids are expected to stay on the conservative side, given current sentiment and the weight of higher stamp duty rates still bearing down on buying. 

A local business sentiment survey sounded an upbeat note this week. The Singapore Commercial Credit Bureau’s Business Optimism Index rose to its highest in a year, for the second quarter of 2024. The construction and transportation sectors were the most optimistic sectors among Singapore businesses. 

Meanwhile, the massive police probe into illicit activity and bad money is slowly but surely widening beyond the S$3 billion in assets already seized since August 2023. Three cars - one a Rolls-Royce - linked to a male Chinese foreigner were towed away from D’Leedon condominium by the police. More names and seized assets may emerge soon. 

News in Reits

Interest costs continued to weigh down Singapore Reits in the second half of 2023. More than three-quarters of trusts that reported results posted lower distributions per unit for the period. But hospitality Reits outperformed, and analysts expect retail counters and data centre businesses to benefit this year. 

One player actively eyeing data centre assets is Keppel, whose Data Centre Fund II tied up with Mitsui Fudosan to buy data centres in Japan. The fund is working towards a proposed forward purchase of a data centre currently under development in western Tokyo. 

ESR agreed to divest its ARA Private Funds (APF) business in Australia, Singapore, South Korea and the United States for US$270 million. The move to part of the asset manager’s strategy to divest up to US$750 million of non-core businesses after it bought ARA Asset Management for US$5.2 billion in 2022.

Shareholder activism flew its flag high at a Sabana Industrial Reit meeting. Unitholders voted for almost all resolutions proposed by Quarz Capital, which has campaigned to internalise management of the Reit. Tempers flared at the highly charged meeting, with angry questions raised on cost and timeline.