CapitaLand Mall Trust's Funan hits 90% pre-leasing mark

The office portion has commitment rates of over 92% whilst the retail portion is slightly behind at 87%.

Fun times are ahead for Funan as CapitaLand Mall Trust’s (CMT) upcoming commercial-retail is already 90% pre-leased, various brokerage reports revealed. According to DBS Equity Research, Funan’s office portion now has commitment rates of over 92% whilst the retail portion is slightly behind at around 87%.

“As it approaches the soft opening date, the manager is mindful about the curation of the tenant mix and will be selective in the names that they introduce to the mall,” said DBS Equity Research analyst Carmen Tay.

Also read: Take-up rates of Capitaland's Funan Mall hits 70%

OCBC Investment Research analyst Andy Wong Teck Ching added that Funan aims to offer first-to-market technologies and retail concepts to deliver an experiential environment to its shoppers and tenants. It is expected to contribute to CMT’s earnings progressively from the second half of 2019 onwards.

However, uncertainties for CMT and the retail sector are ahead with the surge of new supply, given the launches of Jewel Changi Airport and the Paya Lebar Quarter’s retail mall. Wong noted that CMT remains cautious on the near-term outlook given the higher supply.

“Whilst we expect some volatility in the east-side malls, we believe that higher contributions from Westgate and Funan will more than compensate for the expected near-term hurdles that Tampines Mall and Bedok Mall, located in the East, may face now but should normalise in the medium term,” Tay said.

Wong concurred with Tay and said that CMT’s portfolio is expected to remain resilient. “There will no doubt be increased competition, but given that Jewel Changi Airport has also attracted new-to-market brands to Singapore, we see this as future opportunities for retail landlords such as CMT if these brands were to expand their presence to other parts of Singapore.”