SINGAPORE: For fashion store owner Darren Yang, 28, setting up shop in December 2020 at his teenage hangout spot Cineleisure Orchard was “like a dream come true”.
In its heyday, the mall was popular with young people like Yang, and had a variety of shops.
“The decision to set up shop in Cineleisure was influenced by emotions, it was a less rational decision,” said Yang, who co-founded Exit with two friends.
But in his two years at Cineleisure Orchard, he has seen tenants move out one after another.
The mall is near deserted – his store is one of only two remaining fashion retailers operating there, and among an estimated 22 tenants in total as at Feb 2.
“This place was like a hipster town 10 to 15 years ago, but not any more,” said Yang, who expanded his store by taking up a second small unit in 2021, and a third unit last year.
He said he has been able to sustain his business despite the low footfall at the mall as Exit has a good following online and caters mainly to regular customers instead of relying on walk-in shoppers.
The lack of customers in some malls along the prime shopping strip is quite striking, given that the retail sector had recorded higher growth last year, said market observers.
When The Straits Times visited Cineleisure Orchard on Feb 2, sushi and salad chain Maki-San was the only eatery operating in the basement.
An employee said LiHo bubble tea shop was shut in January. Food and beverage operations that have shut in the past two years include Collins, MOS Burger, Menbaka Fire Ramen, Quick Greens and Pastamania.
The spaces on Level 1 were mostly occupied, except for two empty units. There were only two fashion retailers, a mobile phone accessories shop and an art and craft store operating on Level 2, with at least 10 empty units boarded up.
Level three is occupied by gyms, a yoga studio, hair salons and a dance studio. Level four looked empty, with the cineplex operating on level five and six. Bounce Singapore, an indoor trampoline park, operates on Level nine.“This floor is still busy, with people coming for wellness activities,” said Gary Foo, who runs En Motion dance school on the third storey.
Housewives Alda Regina, 46, and Ellayne Soh, 40, who were at Hale Yoga in Cineleisure Orchard, said they do not hang out in the mall after their yoga sessions.
“Most shops are closed and there isn’t much to see,” said Regina.
Right beside Cineleisure Orchard, the five-storey Scape building is also nearly empty, with fewer than 10 tenants operating.
Tan Khee Hua, 72, who runs a store selling pet clothing, said businesses shut during the Covid-19 pandemic.
He has been renewing his lease on a monthly basis.
Last year, Scape announced that the mall will undergo a major revamp and is set to reopen in 2024.
The shutters have also been down for several units at The Cathay mall, which shut its cineplex in June 2022.
A canvas that lists the mall directory and covers one of the empty shop fronts showed 23 shop listings struck out. Some of the units have since been taken up by new tenants.
A spokesman for both Cineleisure Orchard and The Cathay declined to comment.
The Straits Times understands that the lease at The Cathay for The Assembly Ground cafe and lifestyle store, which also houses Benjamin Barker Tailors, will expire in March.
When asked if the firm will renew its lease, a spokesman said: “We are still in the midst of ongoing discussions with our landlord, and nothing has been confirmed.”
A retail worker who declined to be named said business dipped after Leftfoot – a popular sneaker store – and convenience store Cheers closed down during the pandemic.
Those two shops attracted a lot of students to the mall, she said.
Ethan Hsu, head of retail at real estate consultancy Knight Frank Singapore, said The Cathay and Cineleisure Orchard were popular in the past, especially with youth and young adults.
This was due to their tenant mix, which was heavily skewed towards the entertainment sector, with the cinema as the anchor tenant in both malls.
Hsu noted that the entertainment sector was badly affected during the Covid-19 pandemic by safe distancing measures.
Many retailers migrated to online platforms to save on rental and other operational costs, while others could have relocated to prime locations at cheaper rents due to weak demand for retail space during that time, he said.
“When pandemic restrictions were gradually lifted in 2022, shopper footfall naturally gravitated towards the malls with a variety of shops and services that could create a better shopper experience,” Hsu added.
The retail sector started to gain traction after most Covid-19 restrictions were removed in the second half of 2022, said analysts.
Edmund Tie’s quarterly market performance report noted that for the whole of 2022, the Orchard and Scotts Road spaces (prime first-storey) recorded the strongest rental growth of 7.4%, followed by the fringe or suburban area (prime first-storey) at 6.7% and other city areas (prime first-storey) at 3.7%.
Lam Chern Woon, head of research and consulting at Edmund Tie, said possible factors causing high vacancy rates in any mall could include high rental rates and associated operating costs, making it challenging for retailers to sustain their businesses.
“The location and positioning of the mall can have a strong bearing on the footfall and profile of shoppers.
“In addition, malls with a stronger concentration of trades that face competition from eCommerce (such as fashion, home furnishing and electronics) could also come under greater pressure,” said Lam.
Hsu said both Cineleisure Orchard and The Cathay would benefit from “a redesign of their mall positioning and trade-mix strategy to appeal and relate to a new generation of shoppers post-pandemic, with a palette of engaging shopper experiences”.
Meanwhile, rent will always be a factor of market demand and supply, he added.
“Malls with lower footfall will not be in high demand with retailers, and, therefore, rents will have to be palatable to draw in tenants that can hopefully bring in more shoppers and strengthen the profile of the mall.” — The Straits Times/ANN