IN FOCUS: Are there too many malls in Singapore?

SINGAPORE: It is a Monday afternoon and Kinex mall is quiet, save for a stream of shoppers at the basement supermarket.

One of them is Ms Ronda Ng, but she is there only for her groceries, and nothing else.

Just down the road, the area by Paya Lebar MRT station - home to three malls - is bustling.

Ms Ng is spoilt for choice, but it might be too much of a good thing. Singapore, she feels, has too many shopping centres.

With retail moving online, it’s becoming harder for some malls to stand out, she said. “They all have the same shops, same restaurant, same chains, too many.”

Ms Ng is not alone in thinking so. In recent years, retail units sitting empty have made headlines, spurring concerns of oversupply.

Several retail units at Northshore Plaza 1 and 2 closed after being hit by rent hikes and competition from a newly opened mall nearby, CNA reported in April last year. Later that year, businesses at Leisure Park Kallang saw declining footfall and declining sales following the closure of Cold Storage, its anchor tenant.

Even Singapore’s iconic shopping belt, Orchard Road, is undergoing rejuvenation efforts as the area loses its edge to heartland shopping areas and regional shopping districts.

The issue might not be about oversupply, experts said. Instead, it reflects a deeper dissatisfaction with too many familiar and unsurprising mall concepts.

TOO MANY MALLS?

On paper, the numbers suggest a healthy supply of malls in Singapore.

According to Savills, there were about 69 million sq ft of both public and private retail net lettable space in Singapore as of the first quarter of this year.

This means there is 11.3 sq ft of retail space for every person, taking Singapore’s population of 6.1 million. This does not indicate an oversupply, said Mr Alan Cheong, the executive director of research and consultancy at Savills.

The figure is similar to Hong Kong's and lower than those of the US and Canada, which have a higher retail space per capita of 23.5 sq ft and 16.8 sq ft, respectively.

By comparison, Europe sits on the lower end with a retail space per capita of 4.5 per sq ft.

Property analysts told CNA that Singapore’s demand for retail leases in shopping malls has remained strong.

While not all malls are made equal, the top-tier malls are performing very well and enjoy near-full occupancy due to demand exceeding supply, said Ms Sulian Tan-Wijaya, executive director of retail and lifestyle at Savills.

Real Estate Investment Trust (REIT)-owned malls naturally attract tenants and can command good rents, and demand for Housing and Development Board (HDB)-owned spaces has also been high, sometimes attracting very high bids, she added.

So why do some malls fall behind? Location is the most important factor, said Ms Joan Chen, head of retail services at CBRE.

Malls in prime districts or with direct access to transport nodes benefit from accessibility and greater visibility.

High-performing malls typically feature a well-curated mix of tenants – popular brands, experiential concepts, and food and beverage (F&B) offerings – that encourage repeat visits and more time spent.

By contrast, malls with a less relevant or poorly balanced tenant mix often struggle. These quieter malls have lower operating costs and tenants that do not rely on high foot traffic, such as service providers and niche operators, she said.

Retail spaces in Singapore are generally planned within or near residential towns and job nodes to serve the needs of communities, a spokesperson from the Urban Redevelopment Authority (URA) said.

The location and scale take into consideration factors such as the characteristics, size and activities of the surrounding areas.

A FORMULA FOR SUCCESS

Experts say the success of a mall comes down to good management.

Nanyang Technological University’s (NTU) Adjunct Associate Professor Lynda Wee stressed the importance of mall managers knowing their customer base and curating the right tenants.

“They are very clear (about) who they want to serve, what they want, and they gather or curate those same services. And so then, when you arrive, you just naturally feel that yes, this is a mall for me.”

Mall operators need data to know what is working and what is not, she said. One way of doing this is loyalty programmes, which track how and where consumers spend their money.

“They have a way to monitor if they're getting it right or what they need to improve, so that you continue to stay,” she said.

Retail in Singapore is different from countries like the US, where malls are a destination, said Mr Ervin Yeo, CEO of commercial management at CapitaLand.

“In Singapore, in your daily commute, you take the MRT and fall into a mall,” said Mr Yeo, who is also the group chief strategy officer.

This is why developers prioritise location to ensure constant footfall. The next step is to have the content to pick up the flow – the right trade mix that is relevant to shoppers in that area.

“In the markets I work in, Singapore is probably the most refined, the most educated shoppers, because they've seen the whole world,” said Mr Yeo, who has also worked in China.

As Singaporeans are well-travelled, they are clear about what they want.

Sometimes, the trade mix is set by the planner as part of the conditions to prevent an over-concentration of one type of store, he said.

Ms Deborah Tan, director of operations and marketing at Far East Organisation’s commercial group, said tenant curation is one of the most important things they do as a mall operator.

“Our goal is to bring together a mix that is cohesive, serves the community and gives people a genuine reason to visit.”

The right tenant mix depends on the location of the mall, she added.

For example, at lifestyle malls like Orchard Central, there is a deliberate effort to create something distinct to appeal to the younger demographic, through tenants such as Japanese gift and novelty store Hands, Molly Tea, Uniqlo flagship outlet and Yo-Chi.

This is different for neighbourhood malls like West Coast Plaza. Everyday conveniences such as dining options, services, retailers and enrichment schools that residents rely on are prioritised.

Managing director of retail at Frasers Property Adrian Tan said their malls are “strategically embedded” within residential heartlands and well-connected to key transport nodes, reaching nearly half of Singapore’s population.

As the largest suburban retail mall owner in Singapore, Frasers Property manages more than 2,000 leases across 10 malls, with a combined average monthly shopper traffic of over 19 million.

This scale provides significant reach to support tenant growth, he said. Since 2024, the mall operator has onboarded over 220 new-to-portfolio tenants.

“This ongoing renewal keeps our tenant mix responsive to evolving shopper expectations and supports a steady pipeline of new and emerging concepts,” he said.

From a landlord’s perspective, there is a natural preference to secure tenants with proven track records, said Ms Tricia Song, head of research at CBRE.

Operators may seek to place these tenants across multiple malls to maximise returns and reduce leasing risk.

Many of Singapore's large malls are held under REITs – funds that invest in income-generating real estate and distribute returns to investors.

While REITs own a significant portion of Singapore's major retail assets, some large malls remain directly held by developers or other private entities.

Dominant REITs in Singapore include CapitaLand Integrated Commercial Trust (CICT), which owns malls such as Bugis Junction and Plaza Singapura; and Frasers Centrepoint Trust (FCT), which owns suburban malls like Northpoint City.

Given their focus on delivering stable and predictable distributions, REIT managers typically adopt a more “risk-managed” leasing strategy, said Ms Song.

Consumers also tend to gravitate towards shops they recognise and trust. As a result, landlords often compete for the same pool of tried-and-tested tenants, which are seen as safer and more reliable in sustaining occupancy and rental income.

“This further encourages a degree of homogeneity in tenant mix, with an emphasis on brands and concepts that have demonstrated resilience across market cycles,” she said.

SMALL BUSINESSES PRICED OUT?

For budding retailers hoping to establish a presence in malls, the “risk-managed” approach can feel like a competitive disadvantage.

In Mr Clement Low’s seven years in the F&B industry, he has seen his fair share of turnover of neighbouring tenants.

Mr Low is the marketing and business development manager of The Whale Tea, a bubble tea brand that started as a franchise from China in 2019 but now operates independently.

The Whale Tea has nine outlets across Singapore, mostly in malls. At tenancy renewal, rent increases can range from 4 per cent to 7 per cent, which Mr Low considers reasonable. However, he has also encountered rent increments of 20 per cent to 30 per cent.

“A lot of retailers or business owners, they couldn't continue … because it's not doable anymore,” he said, pointing to rising operational costs, including manpower and materials.

By contrast, there are some well-established brands from China that have deeper pockets and can take more risks, he said.

“Some of them, they run the business here, they are not even making a profit yet, but they just keep dumping money just to build a brand … they just want the market share,” he said.

“We cannot afford to do that. So every single one of the shops that we open, we must make sure that it's profitable.”

Developers stressed that rent is not always the deciding factor when picking tenants.

CapitaLand’s Mr Yeo said it is more important for them to think of the overall trade mix.

“Why does the ‘evil REIT’ have bookstores which don't pay high rent? Because you manage the portfolio, so paradoxically, maximising the value of the property does not mean maximising the value of every single unit,” he said.

For example, having a bookstore in a mall can bring footfall during off-peak hours. The vibe and energy it creates justifies the higher rent of other tenants, which then makes up for the bookstore’s lower rent.

“That's how we think about trade mix. Honestly, it's very seldom who can pay the highest rent,” he said, adding that that factor is only considered when deciding between a few similar brands that fall under the same category.

“Otherwise it'll all be gold shops, EVs, massage shops,” he said.

Mr Yeo said pulling together a good trade mix is like having a good plate of economy rice. There are the staples – supermarkets, foodcourts – but also a little something special. In a mall’s case, that means independent and niche brands.

“You need to have those staples, because if your whole mall is very niche, small tenants, it's also difficult to survive,” he said.

A mall can have 200 to 300 tenants. “A percentage of that will definitely have to be your utilitarian ones,” he said.

NTU’s Dr Wee said rent is not an “evil thing”. After all, malls require a lot of capital to build, and REITs have stakeholders – financial investors – that they need to deliver returns to, she said.

She has also observed developers putting more effort into looking at potential over finances when bringing in independent retailers, by offering pop-up spaces for them.

Still, she pointed out that there is a minimum bar that new retailers must be able to meet to survive.

“You need to be able to pay rent for a period of time … if you are a budding retailer, you may struggle, unless someone is here to help you. And then, for those who can pay very well, sometimes they are very ‘boring’,” she said.

WHAT’S WRONG WITH “COOKIE-CUTTER”?

It is the boring, ever-present retailers that have given rise to the phenomenon of “cookie-cutter” malls, a term used to describe malls that look the same.

CapitaLand’s Mr Yeo noted that the term is often used pejoratively.

“I don't think it's a negative. I think it speaks to something unique in Singapore, which is that spending power is not correlated by district,” he said.

Every mall is driven by consumers. “The tenants will only survive if there's business. So the fact that they are there tells you that there's business to be done, and that's something that the consumers want.”

So what is driving the unhappiness?

Shoppers have certain expectations of their malls, said Dr Wee.

“The role of the mall is to engage you emotionally. The role of the mall is to help you compare, because today you are buying a shopping good. A shopping good is something that you want to research and think about,” she added.

Shoppers want to be surprised and engaged – desires that cannot always be met by their nearby malls, she said.

“So it really depends on what you need now, and therefore what is the role that a mall should play for you.”

Recent retail developments like New Bahru and Kada are examples of concepts with a clear vision of who they want to attract and the tenants needed to deliver that vibe, Dr Wee said.

Unlike malls, they don’t have the “sea of sameness” when it comes to tenants, she said.

Dr Wee said the qualifier is that malls have to adjust according to the vibe of their catchment area, instead of just following the crowd.

“If I serve my local (catchment) based on the role they want, I'll do so well that other people come and see how I do it, and they find me refreshing,” she said.

Urban strategist and Associate Professor of Practice at the Singapore University of Technology and Design (SUTD) Calvin Chua added that the discomfort towards similar malls could stem from a general sense that small businesses are getting “priced out” by high rent.

“It's the same cookie-cutter, generic tenant mix wherever you go,” said Mr Chua, who is also the founder of Spatial Anatomy, a research-oriented design practice.

There is a yearning for more distinctive offerings, such as those found in some of the older neighbourhood centres or strata-titled malls.

“I think where the problem lies is that it then starts to replace your HDB neighbourhood centres, it starts to replace the strata-titled malls, it starts to eat away at these other malls that have a unique kind of cultural values and vibes,” he said.

In this landscape, it is important to contrast with the malls that have a niche identity, and which people can go to for specific purposes, said Mr Chua.

“I don't think REIT malls are necessarily bad. They provide the amenities and things for everyday living. But if you're looking for something else, then there are other ... malls that have those unique offerings,” he said.

Bras Basah Complex, for example, is such a mall that has endured the test of time.

The complex started as a hub for xin yao - a genre of Singaporean Chinese music - recitals in the 1980s, then became the go-to place for books. Today, it houses a range of art galleries, music shops and cafes.

The quaint outdoor mall feels worlds away from the cluster of air-conditioned mega malls at Bugis, where throngs of shoppers drift between familiar chains and eateries.

“Whenever I take the car and pass by Bugis, there really are so many people. Our Bras Basah is not like that, because we sell different things,” said Ms Joyce Ong, the chairman of the complex’s merchant association.

“We don’t sell clothes, we don’t have many restaurants, we have arts and culture, so there is a difference. But our shops here persist. Every shopowner has their own way to survive,” she said in Mandarin.

Over the years, Ms Ong and her assistant have turned to social media, organised tours and collaborated with brands to keep the mall alive.

“If not, people will forget Bras Basah, they thought Bras Basah was going to die already. At least I do already, people remember … They can feel the change.

“My friends, my surrounding people, all tell me, ‘Wow, now Bras Basah really changed already.’ Got sheng ming li,” she said, referring to the Mandarin word for vitality.

THE FUTURE OF MALLS

Like Bras Basah Complex, it is the same effort at revival that will shape the future of malls in Singapore, experts said.

While top-tier malls are expected to capture a disproportionate share of discretionary spending and demand, smaller or less differentiated malls may face greater pressure unless they successfully carve out a unique identity or reposition their offerings, said CBRE’s Ms Chen.

Mr Siddharth Pathak, head of consumer industries and retail practice at consulting firm Kearney, said malls must evolve from passive landlords to active curators of experiences.

Over the past decade, consumer behaviour has shifted significantly, driven by factors such as the rise of e-commerce and a broader shift from material consumption to experiences, he said.

“The challenge is therefore not absolute oversupply, but rather a mismatch between supply and evolving consumer expectations.”

To compete with e-commerce and stand out in a dense market, malls must pivot from product-centric to experience-centric ecosystems, he added.

“Ultimately, differentiation lies in redefining the mall as a destination for living, not just shopping. The winners will be those that offer compelling reasons to visit that cannot be replicated online – social interaction, sensory experience, and personal enrichment,” he said.

Efforts are already underway at some major malls.

Frasers has programmes year-round to encourage shoppers to return and spend more time in malls. For example, the operator has installed pickleball courts at Tiong Bahru Plaza and inflatable playgrounds at other suburban malls, said managing director Mr Tan.

Similarly, Far East complements its offerings with events and programmes, such as cosplay competitions and fan meetups with celebrities, said its director for operations and marketing, said Ms Tan.

Moving forward, SUTD’s Mr Chua said more developers will place greater intentionality in placemaking efforts.

They might inject a certain kind of uniqueness into their developments – One Holland Village, for example, is catered to pet owners, he said.

“If retail is dying, malls can be revised into a different form. Maybe it's not just a container for retail shops, maybe it's a container for social activities, elder care centres, community facilities, and so on,” he said, pointing to the trend of more integrated complexes moving forward.

Ultimately, there is “a lot of scope to tighten up” to make malls more compelling, said Dr Wee.

She pointed out that Singapore cannot be “over-malled” if people are still yearning for places to shop at, and even crossing the border to shop at a better price point.

“So based on that, I will say that if you count the mall by the number of malls we have and by the population size, are we over-malled? Yes, we are over-malled. Everywhere you turn, there's a mall,” she said.

“But if you look at, are malls satisfying the roles that we expect them to do? Not yet. That's why we are still looking for the right mall.”

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Source: CNA/er(mi)