By Felda Chay
SINGAPORE - Carrefour's impending departure will leave vast amounts of space that its two current homes - Suntec City and Plaza Singapura - will have to fill. But market experts believe the vacated premises will be taken up quickly, and at more attractive rental yields than before.
Said Letty Lee, director of retail services at CBRE: "The huge vacated space offers an opportune time for landlords to revamp and introduce new as well as more concepts to create variety and to cater to other possibly higher-yielding trades."
Currently, Carrefour has a 140,000 square foot store at Suntec City and a 81,000 sq ft outlet at Plaza Singapura. Its leases for the two locations will end in December and November respectively.
A source that BT spoke to said that the Suntec City premises could be taken up by a supermarket operator. But supermarkets usually take up only 20,000-30,000 sq ft, which will leave plenty of extra space for the mall to fill.
However, an industry expert who cannot be named because she is not authorised to speak to the media said that Suntec City should not face any difficulty finding new tenants.
"Carrefour leaving is not something bad for the mall," she said. "They should not have trouble finding tenants because, generally, space located near supermarkets and hypermarkets is usually popular."
Food retailers, in particular, like to be situated near supermarkets and hypermarkets, she said.
Giant has said it will open a 60,000 sq ft store at Suntec City in the first half of next year and is "interested to explore the good strategic site at Plaza Singapura". But while Suntec has signed Giant as a tenant, the retail chain will open its new store in the basement of the mall, and not at the premises occupied by Carrefour.
Even if a supermarket operator does not come in, the two malls can also potentially earn higher rent now that they can divide the block of space into smaller units, said the industry expert. And space at Suntec City and Plaza Singapura is highly sought after "because both malls are good malls", she said.
"Anchor tenants tend to get more attractive rates. By splitting the space into smaller parts, they can charge more."
Hannah MacDonald, head of retail for Jones Lang LaSalle, noted that Suntec City is currently undergoing a multi-phase S$410 million face-lift, while Plaza Singapura is also going through a makeover.
Carrefour's departure therefore represents a "fantastic opportunity for further improvements to be made to the malls", she said.
"When tenants leave, it is always an opportunity for the landlords to look for new retailers or operators. Carrefour's departure could allow the two malls to source for another supermarket or hypermarket tenant, and still have retail space that new retail tenants can take up," said Ms MacDonald.
Typically, hypermarkets can occupy an area of 60,000 to 80,000 sq ft.
"The two malls now have a chance to restructure themselves and move away from having one very large anchor, and instead have more variety and mix for their malls," said Ms MacDonald.
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