Serious Retail Landlords Double Rents While Biz Slumps!

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An honorable member of the Coffee Shop Has Just Posted the Following:

Retail slump: One Raffles Place is latest to suffer

When One Raffles Place shopping mall reopened in 2014 after a major makeover, it boasted a strong tenant line-up, much to the delight of office workers in the area.

But three years on, all but one of these crowd-pullers have shut or will move out by next month, as the retail slump claims yet another casualty. Lingerie brand Victoria's Secret, fashion retailer Uniqlo and cafe Paris Baguette have already closed their stores at the six-storey mall next to Raffles Place MRT station.

Travel products store Tumi, watch brand Swatch, jeweller Pandora and shoe brand Melissa have decided not to renew their leases and will shut soon. A check by The Straits Times last Friday found that of the 113 tenants, at least 14 have closed.

At least another 13 will be moving out by next month when their three-year lease ends - which means close to 25 per cent of the mall's retail space could be empty.

While it is usual for tenants to come and go, what makes One Raffles Place stand out is that its bigger tenants, which take up prime space on the ground floor, are leaving.

Their impending closure has upset smaller tenants, which claimed they were not told of the moves prior to them renewing their leases.

A tenant, who declined to be named, said he was "shocked" to find out that bigger tenants of the mall were ceasing operations.

"I renewed the lease as the rental was reduced, though it's still on the high side. But even so, it wasn't revealed to us that so many tenants... would be closing shop," he said.

The Body Shop outlet on level three, which is moving out on Thursday next week, has not been making a profit, said its assistant boutique manager Nur Zalifah, 30. She added that the number of customers had fallen after its next-door neighbour Uniqlo closed earlier this month.

Other tenants moving out include Evergreen Stationery, Yami Yogurt and Blow + Bar hair salon.

An employee of Mr Teh Tarik Express, who wanted to be known only as Mohammad, said the cafe was also moving out as the landlord had doubled the rental.

When asked about the poor tenancy at the mall, a spokesman for the mall said: "Given the typical retail lease cycle of about three years, it is normal to see tenant attrition upon lease expiration.

"We are taking this opportunity to refresh the tenant mix and inject vibrancy into the mall. As landlords, we will continue to work closely with our tenants to create new, exciting marketing programmes."

He added, without giving figures, that the mall "enjoys a healthy occupancy rate", and did not disclose what shops would be taking over the empty spaces.

Respite for the mall, however, may come in the form of its anchor tenant, Swedish clothing retailer H&M. It spans level one and two, and has not confirmed if it will be moving out when its lease ends.

Country manager for H&M South-east Asia Fredrik Famm said: "At this moment, we are unable to comment about our store at One Raffles Place. Having said that, the retail market is challenging right now, with many brands consolidating and exiting the market, due to high costs."

Financial consultant Teo Linna, 28, who works in the area, visits the mall thrice a week for client meetings over meals and to get coffee.

"I don't usually shop there, unless it's for necessities, so I can see why the shops are closing down. I'd rather shop elsewhere," she said.

Singapore Polytechnic retail lecturer Sarah Lim said malls in the Central Business District such as One Raffles Place are hit harder by the retail slump than those in Orchard Road because of office workers' limited shopping hours and minimal tourist traffic.

"The shopping peak hour is the lunch hour. Office workers are not going to stay back after work to shop, only to eat and drink," she said.

Correction Note: The management of Mr Teh Tarik Express has clarified that it did not review its lease at One Raffles Place for a number of reasons, such as the opportunity to scale-up its operations at an alternative location.


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