Have some Funan: Can CMT's Funan DigitaLife Mall revolutionise Singapore’s retail?

The mall promises shops without walls.

All eyes are on CapitaLand Mall Trust’s redevelopment of Funan DigitaLife Mall which is said to redefine the future of retail.

According to a report by Maybank Kim Eng, CMT management is aware of the structural challenges facing retail currently, including a tired product of the same chains, high labour costs, e-commerce threat, and ambivalent consumption attitudes from millennials.

“Instead, taking the cue of its location in the Art & Civic District, the new Funan promises experiential retail (“reimagine… shops without walls”), collaborative office space, a high-degree of technology interface, and conducive to personal transport devices (scoots, bicycles),” the report said.

Meanwhile, OCBC said the property is expected to comprise three components: retail, office, and serviced residences.

“The total estimated cost is S$560m, with a targeted completion date in 4Q19. Management estimates an incremental NPI per annum of S$36.6m, which translates into a projected ROI of 6.5%. CMT intends to leverage on Funan’s location at the heart of Singapore’s Civic and Cultural District, and to bring in fresh concepts for the integrated development,” OCBC added.

Meanwhile, analysts from RHB are generally optimistic of Funan’s “Mall of the Future.”

“We welcome the move, as we believe the retailers need to differentiate and incorporate futuristic elements to keep themselves ahead of competition and increase shopper traffic,” RHB Research said.