Funan could bring in $16.5m of rental income to CapitaLand Mall Trust

Its retail segment and office segment are already pre-committed by 90% and 98%, respectively.

CapitaLand Mall Trust could finally reap the benefits from its new mall Funan by H2 2019, according to UOBKH analyst Jonathan Koh and Peihao Loke.

The mall’s retail net lettable area (NLA) is about 325,000 sqft, of which 90% is already pre-committed, the report noted. Funan also has two grade-A office blocks with NLA of 214,000 sqft that are 98% pre-committed, with key tenants including government agencies Attorney General’s Chambers, the Department of Statistics, and Smart Nation & Digital Government Office, as well as coworking operator WeWork.

“Management expects Funan to provide yield-on-cost of 5%. We estimate Funan to contribute rental income of S$16.5m in 3Q19, representing 8% of total gross revenue,” the analysts said.

Also read: Should incumbent malls be threatened by Jewel Changi and Funan in 2019?

The report also noted that the retail mall is designed to integrate online and offline shopping with data analytics and logistic functions to empower modern retailers’ omni-channel strategy. “It has a 24-hour click-and-collect drive-through supported by warehousing facilities. It deploys automated guided vehicles (AGVs) with laser-based navigation system to pick up purchases from retail shops for temporary storage at click-and-collect boxes (shoppers do not have to carry shopping bags),” they explained.

Funan is scheduled to open in June 2019. It is by far 85% larger than its predecessor Funan DigitaLife Mall, which closed on July 2016.