Low occupancy at Clarke Quay a chink in CapitaMall Trust’s armour

Along with cutthroat competition in Jurong.

A two-digit drop in Clarke Quay’s occupancy rate is a key chink in CapitaMall Trust’s armour, along with intense competition for its malls in the Jurong area.

According to Barclays, Clarke Quay’s occupancy declined to 77.6% from 95.9% in Dec 2014 due to the departure of Lifebranz, which used to take up 57,000sq ft or 20% of Clarke Quay’s net lettable area for its entertainment and F&B businesses.

“We understand from CMT management that there has been a lot of interest in taking up the vacated space. We expect some downtime for Clarke Quay which makes up c6% of CMT’s revenues,” said the report.

Meanwhile, its three malls in the Jurong Gateway area continue to face pressure from the increased supply including Big Box and JEM.

"We see challenges and opportunities for CMT: vacancy risk at Clarke Quay, continued near-term oversupply but long-term opportunity in the Jurong Gateway area (where CMT owns three malls), and the potential redevelopment of Funan IT mall," Barclays stated.