Source: Department of Statistics, Singapore
Increasing mall footfall and tenants’ sales Post-CB Period
The reopening of the Singaporean economy post-CB led to people flocking outside their residences, with malls being a popular choice. As a result, several retail REITs announced an increase in foot traffic in their malls.
According to CapitaLand Mall Trust, their overall portfolio of foot traffic and tenants’ sales, per square foot, per month, for 3Q20, recovered to about 60% and 89% of 2019’s levels, respectively. Suburban malls are outperforming with tenants’ sales recovering to around 97% of the level recorded a year ago.
Similarly, by 3Q20, the foot traffic in malls owned by Frasers Centrepoint Trust returned to about 60-70% of the previous year’s levels.
These recoveries, amid the ongoing operational-capacity limit in observance of safe-distancing measures, further signal Singaporean consumers’ general preference for shopping in physical retail stores and dining in restaurants.
Channelling money from overseas travel to domestic spending
It is no secret that Singaporeans love to travel. Based on statistics by the World Tourism Organisation, Singaporeans spent approximately USD 26.6 billion on outbound travel expenditures in 2019, a 42% increase since the beginning of the decade.
However, with travel restrictions in place, some of the money reserved for overseas travel will be channelled towards retail spending. So far, the fine-dining market has benefitted from this shift in consumer spending.
Singaporeans’ have a penchant for visiting malls to escape the heat and socialising over meals with friends and families in air-conditioned comfort. There is an opportunity for mall landlords to leverage these consumer spending habits and capitalise on their preference for in-store shopping and dining. To maintain mall relevance, landlords could create spaces in malls that allow people to connect and linger, while retailers should keep up with changing trends that continue to attract footfall and sales.