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Thread: Why strata malls are struggling to survive

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    Default Why strata malls are struggling to survive

    Why strata malls are struggling to survive

    Monday, October 8, 2018


    It is late afternoon on a weekday and the Novena Regency strata-titled mall looks more like a ghost town than a consumer hub.

    There is not a single person walking about, shutters are down on many shops, while the majority of units are vacant. A handful of eateries are open, but they have few customers, if any.

    Residents live in about 55 units on the upper levels of Novena Regency in Thomson Road, so it ought to be bustling with shoppers. The building is also within 10 minutes' walk of Novena MRT station.

    Its plight is mirrored across Singapore, where some similarly strata-titled malls - those where stallholders own individual units - are struggling. There are about 80 such malls here, according to R'ST Research in 2016.

    Analysts say these kinds of malls often struggle to survive because they do not have a central management to oversee the tenant mix.

    Even some that are quite new and in relatively good locations near MRT stations struggle to get any traction with consumers.

    Take, for example, the revamped King Albert Park Residences, which has two floors of retail space. When The Straits Times visited it last month, fewer than a third of the units on either floor were occupied.

    Shop owners agree it is hard for retailers to survive, but say food and beverage (F&B) or niche businesses have a higher chance of staying open.

    EagleWings Loft, a family-friendly restaurant, opened last year. Pastry chef Lance Lai said: "We try to cater to everyone's needs with both Asian and Western food. We have many residents living upstairs who come here almost every day... Business also picks up on weekends.

    "I think F&B does better here compared to other types of shops because Singaporeans are more willing to travel to eat food they like."

    Orange Maple Bakery is another F&B business at King Albert Park. Owner Belinda Ong said the lack of footfall does not bother her so much because the bakery focuses more on e-commerce than on walk-in customers. "Most of our business is online and people come here to collect their goods," she said. "We only just started a dine-in area that is in a loft style upstairs."

    Other shops survive because they serve a niche group of customers. Mr Bob Lee, owner of 808 Cycles, said people mostly know about his business from his online presence or by word of mouth. His bicycle shop focuses on folding Brompton bikes.

    "The rent is affordable here because there's no one else, so the landlord keeps the rent low," he said. "People don't come here because there is no supermarket and the mall is poorly designed."

    For instance, a shopper has to exit the mall and enter through a separate door to take the escalator to the second floor.

    According to online listings, a 38.18 sq m shop in the mall can be rented for $2,800 a month.

    Poor tenant mix is often cited by analysts when discussing the struggles of strata-titled malls.

    International Property Advisor chief executive Ku Swee Yong said: "Compared to a single-owned mall under a firm like CapitaLand, for instance, the strata-titled mall does not have a plan for the make-up of the mall or have a single coordinating body to do promotions or seasonal events.

    "The worst is that once a tenant enters with a dodgy trade, such as money-lending or offering massages, the whole place becomes unsavoury and people will avoid it."

    Mr Nicholas Mak, executive director of ZACD Group, agreed: "When certain businesses like massage parlours come in, the atmosphere changes and only certain clients will come while everyone else will not go back."

    However, not all strata-titled malls are on their knees. Analysts point to Queensway Shopping Centre as a development that is bucking the downward trend. This is because, unlike other malls of its kind, Queensway has a collection of similar shops selling shoes and sports attire. It is also known for its printing services.

    Ms Ong Choon Fah, chief executive of property consultancy Edmund Tie & Company, said: "Some strata-titled malls are doing well because of the location and they cater to a specific trade or population.

    "(Queensway Shopping Centre) is an established sports-oriented mall known for its wide array of bargain-priced sports apparel and equipment."

    She believes these malls have a place: "They add diversity to single-owned malls, such as those owned by real estate investment trusts, which are often conceptualised and actively managed at the asset and portfolio levels.

    "The lack of a unified concept at the onset gives strata-titled malls the opportunity to develop organically and find their own niche. This gives rise to a bazaar-like atmosphere with diverse trades and can be quite charming. It also provides the much-needed space for entrepreneurs and small businesses to experiment and thrive."

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    Have you guys seen the flow? At katong. Hahaha.

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