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Published August 23, 2006

Food space is ringing the tills at malls
Increasingly, food traffic is boosting shopper traffic at many retail malls


(SINGAPORE) Mall operators are cashing in on Singaporeans' love of food by devoting more space to outlets that will attract and keep shoppers by tempting their taste buds.

Crowd puller: Marina Square's shopper traffic averages 50,000 a day compared to 20,000-30,000 before its 2003 revamp, possibly due to its new F&B mix.

In the past five years, food and beverage businesses have eaten up more and more mall space, with the area allocated to F&B increasing as much as 40 per cent in some cases.

'F&B is emerging as a major crowd puller in retail malls,' says Mavis Seow, director of retail services at property consultancy CB Richard Ellis (CBRE). 'Traditionally, the F&B component in retail lettable space was 15-18 per cent. But developers are increasingly allocating a higher portion of retail space to restaurants, eateries and food courts, and F&B take-up has increased to between 22-28 per cent.'

A good example of the trend is Marina Square, which was extensively revamped in 2003. Before the renovation, F&B accounted for 18 per cent of the tenant mix, according to CBRE. Today, it accounts for 23 per cent.

Knight Frank's executive director Danny Yeo, who was behind the revamp, says that beforehand, shopper traffic was 20,000-30,000 a day. But now it averages about 50,000. The new F&B mix is at least partly responsible, he believes.

Similarly, at Wisma Atria, F&B space has increased from 21 per cent in 2003 to about 30 per cent now - a 43 per cent jump. And shoppers certainly seem to like it - foot traffic at the mall rose 4.5 per cent to 22.1 million last year.

Singapore has always had a reputation as a food lovers' paradise. But industry players say the hunger for even more eateries is in line with the city's evolution as a cosmopolitan centre that requires a range of international cuisine to suit a variety of nationalities.

'Singaporean residents, local and expatriate, are well-travelled and discerning diners,' says CBRE's Ms Seow. 'And for sophisticated shoppers, shopping is not complete without a decent meal within easy reach.'

Knight Frank's Mr Yeo says mall operators have realised that F&B outlets are especially attractive tenants. This is a reversal - as in the past, shopping centre managers often prefered retailers, who were able to pay more rent.

But F&B tenants can now hold their own, due to the seemingly insatiable appetite of foodies for a taste of something different. F&B tenants are also desirable because they usually want less space and less 'prime' locations in shopping centres, whereas retailers prefer more space and a street facade.

Malls are packaging F&B establishments in clusters, and marketing these eating places alone as an attraction.

An example is Raffles City's newly extended basement, where almost half of the new 'market place' is dedicated to food. And the upcoming Orchard Central on the former Glutton's Square site will have an F&B cluster when it opens in 2008.

'Developers know they have to ensure that shoppers are offered a variety of dining choices to keep the traffic up, so shoppers stay on in their malls,' says CBRE's Ms Seow. 'Dining out and entertaining are very much a part of our lifestyle, and developers are keenly aware of this.'

With landlords and food connoisseurs showing more appreciation of F&B, the variety of fare on offer has improved tremendously, observers say.

For starters, more niche food is available. Uberburger made waves when it opened in Millenia Walk in March this year with its $101 wagyu-foie gras-truffle burger. The restaurant is spin-off from upmarket deli-cafe Corduroy & Finch.

There are also more international food concepts, such as the Sun with Moon Japanese Dining and Cafe restaurant and the Pepper Lunch chain of fast-food steak restaurants, both run by the Suntory Group of Japan. Those who fancy exotic fare can also frequent the music-themed Cafe del Mar from Spain or Ivory - The Indian Kitchen from India. International chains such as Bice and Gloria Jean's Coffee have also returned to Singapore recently.

But with rents going up, it remains to be seen whether the myriad F&B operators can deliver the quality and service that will keep fans of good food coming back - and paying the rent - as newer establishments crop up.

According to CBRE, the average prime rent in Orchard Road at end-2003 was $31.60 psf per month - but by the second quarter of 2006, that had increased to $33.60 psf per month. Knight Frank's Mr Yeo says that while F&B tenants are do not usually pay the highest rents in a mall, they do not pay the lowest either.