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The Changing Composition of Singaporean Shopping Centres, 2009-2014:
a preliminary analysis
Dr Keri Davies
Presentation at AAG Annual Conference, San Francisco, March 2016
• Small island with significant economic and population growth
• Climate favours enclosed shopping centres• nearly all developed over last 30 years
• Retained elements of British/ colonial regulatory practices• so the move from independents/ mom and
pop stores has been controlled to a degree
Singapore’s Retail Sector
Population Growth, 1961-2012
1990 forecast:3.5 M by 2030
Actual
1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 20110
5000
10000
15000
20000
25000
30000
35000
40000
45000
Number of Retail Stores & Retail Turnover, Singapore, 1973-2012
Number of Shops Retail Turnover
1992 planned retail hierarchy
By 2008 Central Area is still dominant – although larger than just Orchard Road
Revised Concept Plan 2013
Three main forms of shopping centre:
• early examples established in the Central Area e.g. Lucky Plaza, Peninsula Plaza– primarily strata malls– common to have 5+ floors– in recent years several have been ‘colonised’ by various guest worker communities
The Market in Singapore
Strata Centres
Three main forms of shopping centre:
• ‘managed’ centres– your basic, average type of shopping centre– but many are still likely to have several floors– many of these on Orchard Road but found in other areas around Central Area and elsewhere
– and a higher percentage of service uses than most European and US centres
The Market in Singapore
New Centres - VivoCity
New Centres - Velocity
J-Cube: shopping or leisure?
Three main forms of shopping centre:
• ‘MRT’ centres
– often smaller centres– much more about convenience or day-to-day shopping
– have a core or common set of retail and service use
The Market in Singapore
Yishun MRT, 1993
MRT Growth – Chicken or Egg?2012
MRT Growth – Chicken or Egg?2012Malls over or near MRT stations, 2014
Since mid-2000s the sector has also felt the influence of REITs• welcomed because they have been trying to deal with a perception of ‘clone malls’ (Competition Commission, 2008; UBS, 2014)
• reworked/ revived fabric to differentiate centres• some worries about shorter time horizons
– but has to deal with the influence of CapitaMall, the retail REIT arm of state-linked CapitaLand
The Market in Singapore
• They have also been reaching out actively to attract new retailers to the market– US, European, Australian, Korean, Chinese and
Japanese– local niche retailers have less experience and may have
less influence but can be helped by REITs and their contacts e.g. BreadTalk
– some internet retailers are opening physical stores e.g. kissjane, Zalora but a small part of business
• REITs have brought in more new retailers but there is also a higher rate of ‘churn’ e.g. Lowrys Farm, Vince Camuto
Influence of REITs
In 2009, a survey of 103 malls (Davies, 2012) found:• 12,985 units, of which 424 were empty and 3,054 were in
non-retail uses• 2012 paper based on this data found that there was:
– a high level of similarity between malls located at MRT sites regardless of management type• convenience shopping, duplication of common stores
– a lack of similarity amongst malls in other locations• partly due to importance of strata malls• ‘clone’ effect often limited to just one or two floors; even
managed malls had a high proportion of other uses
Ownership & retail differentiation
Resurvey in late 2014 to look at longer-term impact
By October 2014 several malls were being redeveloped (e.g Eastpoint, Suntec) or had been taken out of general use (e.g. The Heeren), eventually 65 malls in sample:
2009 2014Number of units 8,729 8,947
Increase is part redevelopment, part measurement ‘error’ due to size and complexity of some malls
Sample sizes: 2009-14
Malls surveyed:Orchard D2D3FringeOCR
28 malls
• Despite the construction of a relatively large number of shopping centres since 2009, occupancy rates remain high– some of this is due to the use of pop-up shops– some of it is due to the conversion of retail to other uses
• changing shopping habits, including increased internet usage, have had an effect
• REITs and centre management practices are also having an effect
Some significant changes in just 5 years
Over the 5 years the mix of retailers has been changed overall
International Retailers +127 unitsRegional Retailers + 96 unitsSingaporean Chains +289 unitsIndependent Retailers -592 unitsOther Uses -106 unitsEmpty Units 69 units
Mix of retailers
Services RetailWinners Banks & Loans, Bars,
Beauty & Hairdressers, Dance, Education, Fortune Tellers, Keys & Shoe Repairs, Laundry, Offices, Pools, Restaurants, Tattoo Parlours
Cosmetics, Discounters, Food, Health, Home Furnishings, Luggage, Phones, Religious, Shoes, Supermarkets, Wigs, Wine
Neutral Gyms, Picture framing Department stores, Musical Instruments, Stationery
Losers Games Halls, Internet Gaming, Medical, Money changers, Photo processing
Adult, Art & Antiques, AV (Films & Music), Bags, Books, Cards & Gifts, Clothing, Collectibles, Comics, Crafts, Electrical & Appliances, Florists, Jewellery, News, Pens, Watches
Change by Format and Location, 2009-2014 (Percent)
Int Reg Sing Indep Other Empty
-60
-40
-20
0
20
40
60
80
100
Orchard
Downtown Core
Rest of Central
Fringe
OCR
Orchard Downtown Core Rest of Central Fringe OCR
Orchard D2 D3 Fringe OCR
-20
-10
0
10
20
30
40
MgdMRT
StrataMGD-R
MRT-R
Mgd MRT Strata MGD-R MRT-R
Change by management and location 2009-14 (Percent)
In just 5 years there have been significant changes in many of the shopping centres being studied
Next stage is to try to establish if this is down more to external forces or to the influence of the different management styles, particularly the effect of REITs on the centres that they control
Conclusions
Competition Commission of Singapore (2008) Market Study on Retail Mall Rental Space in Singapore. Summary Study and CCS’ Views. Competition Commission of Singapore: Singapore, October.
Credit Suisse (2011) Singapore Retail REITs. Asia Pacific/ Singapore Equity Research, 14th March. Hong Kong: Credit Suisse.
Davies, K. (2012) ‘The Composition of Singaporean Shopping Centres’, International Review of Retail, Distribution and Consumer Research, 22 (3), pp. 261-275
Fatt, J.P.T. (2001) ‘Retailing in MRT malls in Singapore: Implications for entrepreneurs,’ Asia Pacific Journal of Marketing and Logistics, 13(4), 19-42.
Henderson, J.C., Chee, L., Mun, C.N. and Lee, C. (2011) ‘Shopping, tourism and retailing in Singapore,’ Managing Leisure, 16 (1), 36-48.
Ibrahim, M.F. and Peng, L.F. (2005) ‘The development of Neighbourhood centres in Singapore: From Traditional to Cluster Shopping,’ Pacific Rim Property Research Journal, 11 (4), 373-392.
Sim, L-L., Yu, S-M. And Malone-Lee, L-C. (2002) ‘Re-examining the retail hierarchy in Singapore. Are the town centres and neighbourhood centres sustainable?’ Town Planning Review, 73 (1), 63-81.
References