How Singapore retail is innovating amidst economic headwinds

Recent retail consolidations and brand exits from Singapore have sparked concerns about the retail property market’s recovery amid economic slowdown caused by the global trade tariff conflict.

Despite these challenging operating conditions, the retail property market should remain resilient for several key reasons:

Singapore maintains a competitive edge over other Asian cities for new market entrants expanding in Asia. This advantage stems from its strategic location in the heart of Southeast Asia, pro-business environment, multilingual population, macroeconomic stability, and commitment to a rule-based system.

Overseas brands, particularly those facing saturated home consumer markets, expand to Singapore to drive regional growth and facilitate capital access. Recently, Chagee, a Chinese specialty milk-based tea retailer which opened ten stores across Singapore malls or retail amenities within one year of its launch, successfully listed on NASDAQ.

Additionally, in times of uncertainty, established brands would remain in Singapore anchored by the perceived spending power of local consumers and tourism growth. The Singapore Tourism Board announced record tourism receipts of SGD 29.8 billion in 2024.

Retail consolidation is an integral part of business development to maximise profitability in an intensely competitive industry. Recent store closures, including anchor tenants such as BHG at Junction 8 and Cathay Cineplex at West Mall and JEM¹, resulted from both structural and cyclical challenges.

The exit of these large-space occupiers offers an opportunity to reconfigure expansive areas into smaller units for specialty stores, potentially yielding higher rental rates. In 2022, Raffles City exemplified this strategy by transforming a large space vacated by an anchor tenant into smaller units, successfully leasing them to smaller-format and specialty retail brands.

Retail consolidation creates opportunities to meet evolving market trends by refreshing tenant mixes with new retail and F&B concepts in malls.

Shoppers increasingly emphasise having engaging experiences and fulfilling lifestyle needs. Landlords can curate replacement brands that drive foot traffic through in-store engagements.

Increasingly, brands ranging from fashion boutiques and department stores to car showrooms and bookstores set up a restaurant or a café within their spaces, creating a lifestyle destination, to enhance the overall shopping experience and drive foot traffic and spillover business to their core retail operations.

The growing emphasis on personal health, fitness and wellness could further drive growth in sports-related retail operations, riding on the rising demand for premium athleisure and sportswear.

Economic uncertainty and higher living costs present landlords with opportunities to incorporate more budget-friendly dining options in malls. Some F&B operations have closed their high-end dining concepts, pivoting instead to pocket-friendly dining operations.

Leveraging its competitive advantage and with landlords implementing proactive asset management strategies, Singapore’s retail property market will continue to innovate to changing market conditions.

^{1 The Straits Times article, Shaw Theatres to take over Cathay cineplex at JEM mall, 8 May 2025: Shaw Theatre is set to take over the cinema space previously occupied by Cathay Cineplex at JEM.}