- Khalil Adis, Property Report
Singapore faces an impending oversupply in retail space with majority of the additional 5.8 million sq ft of space - expected between 2009 and 2013 - to be ready this year.
According to DTZ, approximately 3.5 million sq ft of retail space will come on stream this year with the bulk of it going to other city areas.
Supply of retail space in other city areas will be approximately 1.7 million sq ft whilst Orchard/Scotts Road and suburban areas will be approximately 1.3 million sq ft and 0.5 million sq ft respectively.
The bulk of the new supply is mainly due to the opening of three large malls in Orchard Road and the Marina Bay Sands Integrated Resort.
However, this new supply will present challenges for Singapore as the country is currently experiencing declining visitor arrivals whilst retailers face consumption cutbacks and landlords are concerned about securing occupancy.
Still, DTZ said the new supply, particularly in Orchard/Scotts Road is not excessive as it has been about a decade since the last major new development took place in the vicinity.
In addition, as prime retail space is a limited asset in Orchard Road, the new space would provide opportunity for new-to-Singapore retailers to get a foothold on the retail scene.
DTZ also said this new supply is necessary for premier shopping belt like Orchard Road “to be rejuvenated with new malls, new retail concepts and new-to-market brands to maintain its status as a world leading shopping destination”, in light of growing competition from cities in the region.
While guests staying in nearby hotels are the main catchment for the Orchard/Scotts Road area, a large catchment of retail space in other city areas will come from the working population in the area.
Office space in the area accounts for about 63 percent of islandwide office space.
Meanwhile, the new supply in suburban areas is due to residents´ needs for more retail space or an integral part of large-scale commercial and recreational developments.
However, the success of these new malls would be at the expense of HDB shops and old strata-titled malls, which are not near to MRT stations or public housing estates.
On the overall, Singapore´s retail space per capita is much lower compared to Hong Kong´s.
In fact, DTZ notes there has been a decrease in Singapore´s total retail space per capita, taking into account an average population growth of 2.3 percent annually in the last ten years.
DTZ expects Singapore’s total retail space per capita in 2013 to fall further to 10.0 sq ft from the 10.1 sq ft in 2008 and 10.6 sq ft in 2007, taking into account population growth and potential supply in 2009 to 2013.
According to DTZ, approximately 3.5 million sq ft of retail space will come on stream this year with the bulk of it going to other city areas.
Supply of retail space in other city areas will be approximately 1.7 million sq ft whilst Orchard/Scotts Road and suburban areas will be approximately 1.3 million sq ft and 0.5 million sq ft respectively.
The bulk of the new supply is mainly due to the opening of three large malls in Orchard Road and the Marina Bay Sands Integrated Resort.
However, this new supply will present challenges for Singapore as the country is currently experiencing declining visitor arrivals whilst retailers face consumption cutbacks and landlords are concerned about securing occupancy.
Still, DTZ said the new supply, particularly in Orchard/Scotts Road is not excessive as it has been about a decade since the last major new development took place in the vicinity.
In addition, as prime retail space is a limited asset in Orchard Road, the new space would provide opportunity for new-to-Singapore retailers to get a foothold on the retail scene.
DTZ also said this new supply is necessary for premier shopping belt like Orchard Road “to be rejuvenated with new malls, new retail concepts and new-to-market brands to maintain its status as a world leading shopping destination”, in light of growing competition from cities in the region.
While guests staying in nearby hotels are the main catchment for the Orchard/Scotts Road area, a large catchment of retail space in other city areas will come from the working population in the area.
Office space in the area accounts for about 63 percent of islandwide office space.
Meanwhile, the new supply in suburban areas is due to residents´ needs for more retail space or an integral part of large-scale commercial and recreational developments.
However, the success of these new malls would be at the expense of HDB shops and old strata-titled malls, which are not near to MRT stations or public housing estates.
On the overall, Singapore´s retail space per capita is much lower compared to Hong Kong´s.
In fact, DTZ notes there has been a decrease in Singapore´s total retail space per capita, taking into account an average population growth of 2.3 percent annually in the last ten years.
DTZ expects Singapore’s total retail space per capita in 2013 to fall further to 10.0 sq ft from the 10.1 sq ft in 2008 and 10.6 sq ft in 2007, taking into account population growth and potential supply in 2009 to 2013.
