Friday 29 Mar 2024
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SINGAPORE (June 2): Shopping malls located in well-populated suburbs are generally thought to be more resilient than those on Orchard Road or in the CBD. While suburban malls sell everyday necessities, those in the downtown area sell luxuries, which are subject to the vagaries of consumer spending trends.

In recent years, much has been said about the lack of footfall on Orchard Road. Property sector watchers have pointed out that some shops at the retail podium of One Raffles Place, which is owned by OUE Commercial REIT, have closed, including Uniqlo and Ever green Stationery.

For many investors, the premier locally listed suburban mall operator is Frasers Centrepoint Trust (FCT). While it is much smaller than CapitaLand Mall Trust (CMT), all six of its properties are located in thriving suburban areas.

Yet, FCT has not been immuned to soft retail spending trends in Singapore. In the 2Q17 ended March, shopper traffic at its malls declined 3.5% y-o-y and 7.7% q-o-q. Tenant sales for the three-month period from last December to February was 12.1% lower compared with the same period last year. Excluding Northpoint, which is undergoing an asset enhancement initiative, portfolio tenant sales were 6.9% lower y-o-y.

Find out how FCT plans to keep up with its competitors in the retail industry in this week’s edition of The Edge Singapore (Issue 782, week of June 5), available on the newsstands now.

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