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Opening of Flagship Stores Highlight Orchard Road’s Appeal
Japanese retailer Uniqlo opens its first South-east Asian flagship at Orchard Central tomorrow. Others like Michael Kors and Apple are following suit. Photo: Damien Teo
September 1st, 2016 | 08:57 AM | 1854 views
SINGAPORE
SINGAPORE — The rise of suburban malls and e-commerce may have affected retailers on Orchard Road, but the opening of flagship stores by international brands here is testament that the shopping belt has not totally lost its sheen, said the chief executive of Starhill Global Reit.
“We will not see things like the first flagship stores opening in suburbs. I don’t think that’s the trend … the first landing point for most retail (brands), in any city in the world, is the core downtown. So, the location strength can’t change,” said Mr Ho Sing, who was one of the panellists at a roundtable discussing the challenges and outlook for Singapore’s real estate investment trusts (Reits).
Japanese retailer Uniqlo will open its first South-east Asian global flagship store at Orchard Central tomorrow. Several others, including US lingerie brand Victoria’s Secret, fashion house Michael Kors and Apple, are also adding their flagship stores to the belt.
Mr Ho said amid the challenging retail landscape, tenant mix is key to maintaining an edge and the Reit has been working on introducing new-to-market brands at its malls. Starhill Global Reit’s portfolio includes Wisma Atria and Ngee Ann City on Orchard Road.
He added that while e-commerce has attracted shoppers looking for value buys, many still prefer to purchase higher value items in store. Therefore, premium shopping destinations such as London’s Bond Street, Japan’s Ginza and New York’s Fifth Avenue will continue to attract traffic.
The Reit sector in Singapore, or S-Reits, has held up despite the increasingly challenging economic environment with a year-to-date gain of 11 per cent, outperforming the benchmark Straits Times Index’s 2 per cent loss, noted Mr Soong Tuck Yin, executive director of Macquarie Securities Singapore, who was the moderator at yesterday’s roundtable.
“Since the inception of Reits from 2002 till now, the growth rates have slowed … so the environment has been a little bit more challenging. However, S-Reits’ yield of 6.1 per cent offers the highest yield spread in developed Asia relative to Hong Kong, Australia and Japan. Organic growth is a big challenge (for S-Reits), so overseas expansion is a key trend in the last three to four years,” he said.
“There’s still a group of investors out there chasing yields. Secondly, post-Brexit, there’s some money flowing from European real estate investments into Asia due to concerns over what will happen in Europe due to the uncertainties.” LEE YEN NEE
Source:
courtesy of TODAY
by LEE YEN NEE
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