Budget-constrained shoppers avoiding CapitaMalls

Shopper traffic in 1H slowed to 3% from 3.6% YoY while tenant sales have a sadder story.

According to DBS Group Research, in line with the general market, the economic slowdown has somewhat affected consumer spending, resulting in slower shopper traffic.

“ The management also alluded that the slowdown was largely attributed to its four malls - IMM Building and Plaza Singapura, which are affected by ongoing or surrounding construction (this should be a temporary blip), and Lot 1 and Funan DigitaLife Mall, which are facing increased competition (this is a chance for tenant repositioning and asset enhancement in the longer term),” said DBS.

Meanwhile, the trust has announced that it would be repositioning IMM to become the largest outlet mall in Singapore. Enhancement work had begun in May and will be completed in a year.

"The mall will see a doubling of its outlet stores to 40-50 brands upon completion. While this could potentially lower the average rent, we think it would drive footfall in the longer term in view of the new
competition," noted DBS.