North Asian retailers out to woo local shoppers

North Asian retailers out to woo local shoppers

SINGAPORE - North Asian retail brands are joining the array of international brands in Singapore and even making their way into the suburbs.

The influx of the regional brands is in response to increasing demand from South-east Asian markets, said property research and consultancy firm Savills yesterday.

Along the shopping belt of Orchard Road, Hong Kong fashion conglomerate i.t has committed to a total 20,000 sq ft of retail space at the upcoming orchardgateway and Wisma Atria.

South Korean fashion labels are also making their presence felt - leading apparel brand Headline Seoul opened its flagship store at Wheelock Place in January; popular shoe label Spur made its debut at Plaza Singapura in February.

But the rising affluence of heartlanders has also led North Asian brands to look for retail space in suburban malls, noted Savills Research senior director Alan Cheong.

Japanese retailer Books Kinokuniya, for example, will open its newest outlet at Jem, the upcoming mall in Jurong East. Korean bakery chain Paris Baguette will set up its second outlet at the suburban mall.

"It's a movement of the brands that (first) set foot in Orchard Road into the suburbs," said Mr Cheong.

Meanwhile, the supply of net lettable area in suburban malls is expected to rise by 2,165,000 sq ft when newcomers like Westgate, Big Box, Bedok Mall, The Seletar Mall, Hillion Mall, Waterway Point and Jem are completed.

But demand for suburban retail space still outstrips supply, and rentals are still expected to remain strong, rising at 6 per cent every three years and 2 per cent on an annualised basis, Mr Cheong added.

"That sends the message that the market is actually in the suburbs."

However, even as more retailers are moving to the suburbs, rents for prime space in the city, Orchard Road and Central Business District, are likely to be maintained.

The average monthly rent for prime space of between 500 sq ft and 1,500 sq ft in Orchard Road was $35.10 per sq ft (psf) in the first quarter, according to Savills.

Stores that target the mass market and thrive on high turnover volumes will continue to strengthen their presence in the prime areas, Savills said.

For example, popular brands like H&M, Sephora and Uniqlo are set to open at Suntec City after renovations there are completed.

For landlords of suburban malls, they may prioritise securing more anchor tenants rather than asking for higher rentals from specialty stores to ensure higher occupancy rates in their malls, said Mr Cheong.

Anchor tenants, such as departmental stores, pay lower rents on a psf basis, but take up more lettable area. Specialty stores, like fashion retailers, take up smaller spaces at higher rents. "It is easier to fill up a mall with anchor tenants," he said.

"But if you want to be different from others, like Tampines Mall or Junction 8, then you may want to fill up most of the mall with specialty stores."

ocheryl@sph.com.sg


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