Resilience of Suburban malls

RETAIL operators with physical outlets are struggling due to the relentless rise of online shopping both in Singapore and overseas. Landlords have seen rents fell by 15% year-on-year in 2020. In 2019, Singapore Tourism Board announced plans to revamp the Orchard Road shopping belt, but with international leisure travel unlikely to resume yet, it is unlikely that the buzz will return.

CapitaLand has marked down the valuation of ION Orchard, Jewel Changi Airport by 8% and 17% respectively from a year ago. For malls held by CapitaLand Integrated Commercial Trust (CICT), the latest valuations of Tampines Mall and Junction 8  dipped by around 1% while those for Plaza Singapura and Raffles City declined by 4% and 6% respectively. 

On the whole, suburban malls performed better as they tend to have higher exposure to essential services such as food and beverage outlets, supermarkets and pharmacies, compared to malls in the city. Moreover, they are often located within HDB towns with access to MRT stations and bus interchanges, translating to a ready catchment population. 

The access to population catchments and the provision of essential services of the suburban malls are being reinforced by the inability of people to go for overseas shopping trips in the near term. The move to impose goods and services tax on all online purchases could also move some purchases from cyberspace to shops at suburban malls.