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:
Retail consolidation creates opportunity to reconfigure space for higher rent
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.