[url]http://www.straitstimes.com/Money/Story/STIStory_443363.html[/url]

October 17, 2009 Saturday

[B][SIZE="5"][email protected] to open on Dec 3[/SIZE][/B]

[B]Newest mall expects competition but retail figures are improving[/B]

By Jessica Cheam


THE date has been set. Orchard Road will welcome a glitzy new mall to its famous shopping strip amid the upcoming Christmas season - a move set to give the local retail scene a much-needed boost.

Australian developer Lend Lease Retail told The Straits Times yesterday that the [email protected] mall at Somerset MRT Station will open its doors on Dec 3 with a strong Christmas theme.

The mall - one of the few here with the highest award for environmental standards - is 100 per cent leased with anchor tenants such as Spanish retailer Zara and American fashion giant Forever 21.

The opening of [email protected] will cap a milestone year for Orchard Road, which has undergone a dramatic make-over, with nearly half of its shopping centres under renovation or construction.

Two other high-profile shopping malls opened earlier this year - ION Orchard at Orchard Turn and Orchard Central next to Somerset MRT station.

[email protected]'s opening could also prove a turning point for the local retail scene, which has suffered under the recent global economic crisis with lower consumer spending and tourism receipts.

Lend Lease Retail development marketing director Karon Cameron said she was confident the mall would do well on the back of signs of economic recovery.

The developer will provide support staff, runners, visual merchandisers and even a drinks delivery team for all its tenants during the 48-hour period before its opening day, said Ms Cameron.

She was speaking on the sidelines of the annual two-day International Council of Shopping Centres Asia Expo held at Suntec City yesterday.

Working closely with tenants has been a key strategy in attracting retailers - especially during a downturn, she said.

For example, Lend Lease tailor-made solutions to meet the needs of its retailers, such as redesigning floor plans of the mall to accommodate individual retailer's businesses.

The developer also formed focus groups with retailers to improve communication, and provided retail training for its tenants' staff, said Ms Cameron.

Tenant engagement was also key in CapitaLand's strategy to help tenants at its malls ride out the downturn, said CapitaLand Retail's head of asset management, Mr Richard Ng.

The company used a variety of strategies to drum up sales for its tenants during the recent recession, which helped the company achieve rental income growth.

In the first six months of this year, rental rates for renewed leases grew by 1.5 per cent, said Mr Ng, who also spoke at the conference.

Some of the measures included spending nearly $14 million on marketing activities to attract shoppers to its malls, and offering marketing support to tenants.

The company also helped tenants to downsize or relocate to obtain lower rent. It also issued CapitaLand vouchers, which drove sales back to the retailers at its malls, added Mr Ng.

CapitaLand paid out $1 million in staff bonuses earlier this year in the form of vouchers redeemable at its malls. It aimed to help its retailers by stimulating consumer spending.

'This is a very powerful tool, and we have weathered the crisis quite well using this,' said Mr Ng.

Analysts such as HSBC economist Robert Prior-Wandesforde said the latest retail sales figures show the consumer might be back in full spending mode.

Shoppers spent $2.6 billion - 5.2 per cent more on retail goods in August than in July, the biggest monthly increase since February, according to the Department of Statistics.

'It looks to us that the fundamentals are stacking up for an ongoing improvement in consumer spending,' said Mr Prior-Wandesforde.

Lend Lease expects some intense competition in the retail sector with Orchard Road's other new malls, and also those at the upcoming integrated resorts, said Ms Cameron.

'But we look forward to it. It will be an exciting period ahead,' she said.

[email][email protected][/email]