Mandarin Gallery to house two giant flagship stores

They will account 30% to the mall's retail rent income.

Mandarin Gallery (MG)'s retail income is expected to bounce back by 12% YoY to S$35m in FY17 with the opening of flagship stores of luxury brands Michael Kors and Victoria's Sectret in the second half of 2016.

CIMB notes that in 1H16, retail income of MG fell 16% yoy to S$15.3m. The decrease was due to lower average occupancy of c.81% in 1H16, owing to fit outs for MK and VS. MG recorded an effective rent of S$24.60 psf pm in 2Q16 vs. S$24.20 psf pm in 2Q15.

Accordingly, MK and VS together account for c.15% of MG’s NLA of 125,293 sq ft, and CIMB expects the two tenants to contribute 30% to the mall’s retail rental income.

MG will be home to MK’s prototype flagship store collection, housing for the first time in Southeast Asia MK's men’s line and runway collection.

Meanwhile, the VS store in MG is its first full assortment flagship store in Southeast Asia.

MK and VS have signed long lease periods of seven and 10 years, respectively and CIMB expects this should enhance OUEHT’s income stability.