S'pore loses shopping bliss as malls suffer
AFTER serving only a handful of customers in five hours on a recent weekday, Sam Goh said he was worried the sportswear shop he manages will join other brands in leaving Orchard Road shopping boulevard.
Singapore's reputation as a shoppers' paradise, which saw investors pour $10 billion into retail developments here in the past five years, is taking a pummelling because of weakness in the local economy and a drop in spending by tourists.
Commercial space has increased by a tenth in that period, but vacancy rates have risen to 7.3 per cent from 5 per cent and industry analysts expect them to keep rising.
"Instantly, when you enter this mall, you see emptiness," said the 44-year-old Mr Goh, whose shop gave up a quarter of its space last month to cut costs.
Down the street, cashiers play games on their phones, while some shop assistants have improvised a mini-golf game along a quiet corridor of a shopping centre.
Thirteen of 16 units on the 5th floor lack tenants.
Store space in places with lower foot traffic is getting few takers. For example, in a suburban area on the west side of Singapore, more than two-thirds of a basement shopping centre that has been open for almost two years remains empty.
These are signs of bets gone wrong: that the domestic economy would remain robust, and that retail splurges by visitors from the rising middle classes in China, India and South-east Asia would keep increasing.
But the sluggish global economy has put a brake on spending by Singaporeans.
Shoppers from abroad, meanwhile, spent 7 per cent less in the first nine months of 2015 than they did in the same period of 2014.
Wealthy Chinese, hit by an economic slowdown and a corruption crackdown at home, have less appetite for luxury items. China has also built many of its own luxury malls and set up duty-free paradises in local tourist hot spots.
And Indonesians, Thais and Malaysians now have cheaper versions of the same products back home. A luxury bag made by Coach can cost twice as much in Singapore as in these countries.
In Bangkok and Jakarta, retail space has risen 20 to 25 percent in five years, with vacant space shrinking, data from real estate firm CBRE shows.
More than 2 million sq ft of new retail space will be ready for occupation in Singapore by the end of next year, and it won't be easy to find tenants.
Hopes are pinned on The Great Singapore Sale, which started on Friday and will last 10 weeks this year.
But discount signs have been ubiquitous for some time.
Robinsons stores, for example, have been offering up to 70 per cent off a variety of goods for the past two weeks.
"My family and I used to shop... almost every week," said 50-year-old store manager Dino Ahmari. "Now we make it a point to spend only once every two months."