Glitzy Orchard Road malls losing their glam as locals turn to suburban retail centres

The posh shopping havens are struggling to capture customers.

A dark cloud is looming over the glamorous malls of Orchard Road. The glitzy district has always been a draw for tourists, but locals are shunning these central shopping complexes for smaller regional centers in the suburbs.

According to a report by Colliers, the rental gap between prime retail space in Orchard Road over similar space in regional centres further narrowed in Q3, from 8.4% in the preceding quarter to 7.5% this quarter.

The report notes that this narrowing rental gap illustrates that Orchard Road malls are heavily dependent on vanishing tourist dollars, while regional centres enjoy a steady flow of footfalls because these centres are patronized by locals.

"With greater pressure on malls in Orchard Road which heavily depend on tourist patronage, we are likely to see a minor adjustment of -1 per cent to 0 per cent in the average monthly gross rents for prime ground-floor retail space. Regional Centres are expected to see a comparatively-better rental growth of between 1 per cent and 2 per cent for the entire year,” said Colliers International Director of Research & Advisory Chia Siew Chuin.