Reit-owned malls more likely to forgo higher rents for right tenant mix
These considerations set them apart from private commercial landlords, who may act more freely in setting rents, said analysts.
Their comments come amid mounting concerns over surging retail rents.
Headlines have spotlighted businesses facing steep rent hikes. Flor Patisserie, a local bakery, announced plans to shut its doors in April 2025, after its landlord raised the rent of its shophouse unit by nearly 60 per cent. The food and beverage (F&B) sector also saw a record number of closures last year, even as large China retailers expanded their footprint in malls.
Analysts said such sharp increases in rent are more typical among private landlords or in prime locations within malls. They also noted that strata-titled properties and shophouses operate under different motivations from institutional landlords.
According to real estate consultancy Cushman & Wakefield, prime retail rents in both the Orchard and suburban areas have slightly surpassed pre-pandemic levels.
A NEWSLETTER FOR YOU
Tuesday, 12 pm Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
Sign Up
Sign Up
The prime monthly rent for the Orchard area rose from S$35.77 per square foot per month in 2019, before the Covid-19 pandemic hit, to S$35.83 psf in 2024. In suburban areas, the prime monthly rent rose from S$31.76 psf in 2019 to S$32.90 psf in 2024.
However, there is no publicly available breakdown of rent rates for commercial properties between malls managed by S-Reits and private landlords, such as shophouses and strata malls.
Rents not 'main priority' for S-Reits
Rents are 'not always the main priority' of S-Reits as they place greater importance on tenant curation, said Sulian Tan-Wijaya, the executive director of retail and lifestyle at real estate consultancy Savills Singapore. On the other hand, private landlords tend to vary rent depending on their own strategies and objectives, and are more flexible with concepts and operating hours, she added.
The structural differences in lease tenure also play a role. Private landlords often offer short leases of up to two years, while malls under S-Reits tend to sign tenants on longer terms of at least three years, with renewal options. This locks in rent levels and contributes to rental stability at malls managed by S-Reits, said Carmen Lee, head of investment research at OCBC.
Nevertheless, the changing habits of consumers, as well as the increasing cost of running a business, can contribute to the perception that rents are rising faster, said analysts. They pointed out that the cost of manpower and utilities have also increased alongside rent, even as Singaporean shoppers go overseas or online to stretch their dollar.
'When sales are down, every cost, including rent, would naturally be high by comparison,' said Tan-Wijaya.
The chief executive officer of Lendlease Global Commercial Trust Management, Guy Cawthra, said all malls have a spread of rents across their property, depending on the unit size, location and amenity, such as F&B or healthcare. There will 'undoubtedly be competition for tenants for the best space' in the best malls, which 'naturally' drives up rents, he noted.
The trust is the manager of Lendlease Global Commercial Reit, which counts 313@Somerset, Parkway Parade and Jem among its retail properties in Singapore.
Managing considerations
S-Reits agreed that it was in their favour to ensure that tenants remain supported with sustainable rents.
A spokesperson from CapitaLand Integrated Commercial Trust (CICT) said that it aims to strike a balance between supporting its tenants' growth and keeping its malls relevant to the needs of shoppers, while delivering long-term sustainable returns to its unitholders.
CICT's retail portfolio includes prime malls such as Ion and Raffles City Singapore, as well as suburban malls such as Tampines Mall and Bukit Panjang Plaza.
CICT works with tenants on their leasing arrangements to support their business needs. This includes tracking tenants' occupancy cost, which is the total rent as a percentage of total tenant sales. Its occupancy cost has remained below 19 per cent over the past seven years, with tenant sales consistently outpacing rent increases.
Similarly, Cawthra said that Lendlease is 'highly aligned' with its tenants. 'We want them to succeed, (and we want to) maintain high occupancy and continue to provide a vibrant retail offering for our shoppers.' To that end, Lendlease monitors its tenant sales performance and supports them when required, such as through marketing and promotions.
A spokesperson for Frasers Centrepoint Trust (FCT), which manages 10 properties, mostly suburban malls, said that the trust 'constantly curates and refreshes (its) tenant mix' based on consumer trends, as well as concept relevance and long-term viability of the tenant's business.
The manager of Suntec Reit has taken a similar approach, introducing youth and family-oriented concepts at Suntec City to transform the mall into an 'experience hub' rather than a 'shopping destination'.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
21 minutes ago
- Business Times
China's US$11 trillion stock market is a headache for both Xi and Trump
[BEIJING] At the heart of why consumers in China save so much and spend so little, and why Xi Jinping and Donald Trump will struggle to change that behaviour even if they want to, lies the country's stock market. Even after a recent rally, Chinese indexes have only just returned to levels seen in the aftermath of a dramatic bubble burst a decade ago. Instead of incentivising consumers to spend, poor equity returns have nudged them toward saving. A US$10,000 investment in the S&P 500 Index a decade ago would now have more than tripled in value, while the same amount in China's CSI 300 benchmark would've added just around US$3,000. Part of the reason, long-term China watchers say, is structural. Created 35 years ago as a way for state-owned enterprises to channel household savings into building roads, ports and factories, exchanges have lacked a strong focus on delivering returns to investors. That skew has spawned a host of problems from an oversupply of shares to questionable post-listing practices, which continue to weigh on the US$11 trillion market. The country's leaders are under pressure to fix this. President Xi is counting on domestic spending to reach the 5 per cent economic growth goal, especially as a tariff war with the US heats up over the massive trade imbalance. At the same time, Beijing has reasons to keep prioritising the market's role as a source of capital: the country needs vast funding to nurture companies that underpin its tech ambitions – even if their profitability remains questionable. 'China's capital market has long been a paradise for financiers and a hell for investors, although the new securities chief has made some improvements,' Liu Jipeng, a securities veteran who teaches at China University of Political Science and Law, said in an interview. 'Regulators and exchanges are always consciously or unconsciously tilting toward the financing side of the business.' The limits of China's stock rally have again been evident this year. The CSI 300 has risen less than 7 per cent despite a burst of optimism over AI, trailing benchmarks in the US and Europe. The underperformance – along with factors including an uncertain economic outlook – helps explain China's extraordinarily high savings rate, which stands at 35 per cent of disposable income. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Chen Long, who works in the asset management industry, has taken to social media platform Xiaohongshu to warn people of the risks of chasing the recent rally. 'Many ordinary people come in thinking they could make money, but the majority of them end up poorer,' Chen said in an interview, adding that he has been investing since 2014. 'State-owned companies primarily answer to the government rather than shareholders, while many private entrepreneurs have little regard for small investors.' Over the past year, China's top leadership has shown greater awareness of the stock market's importance as a vehicle for wealth creation. That's especially the case with an ongoing property slump and a fragmented social safety net, which exacerbates a sense of insecurity. The Communist Party's Politburo pledged to 'stabilise housing and stock markets' in a December meeting – a rare expression of support for equities at the high-level gathering. The body also called for 'increasing the attractiveness and inclusiveness of domestic capital markets' in July. There is no quick fix to boosting household confidence 'except for a stock market rebound,' said Hao Hong, chief investment officer at Lotus Asset Management. 'This is a topic that we economists have been discussing in the closed door meetings in Beijing.'' In some ways, the market's malaise has been decades in the making. 'The exchanges are motivated to fulfill the government's call for increasing companies' financing,' said Lian Ping, chairman of the China Chief Economist Forum, a think tank that advises the government. 'But when it comes to protecting investors' interests, there are few who are motivated to do it.' An explosive growth in new listings made China the world's biggest IPO market in 2022. Yet insufficient safeguards for shareholders and lax oversight of IPO frauds have led to share price crashes and delistings – what retail investors refer to as 'stepping on a land mine.' Take Beijing Zuojiang Technology, which listed in 2019. The company said in a 2023 statement that its product was modelled after Nvidia's BlueField-2 DPU. The company warned in January the following year that it was at risk of being delisted, citing an investigation for disclosure violations. It was subsequently removed from the Shenzhen bourse. The China Securities Regulatory Commission didn't immediately reply to a fax seeking comment. Recent years have seen greater efforts to screen poor-quality IPOs and crack down on financial fraud. There's also a push to reduce additional stock issuances by listed companies and share sales by major stakeholders, while encouraging more corporate profit to be passed on to investors. There has been visible progress. Initial public offerings shrank to nearly a third of 2023 levels last year. Shanghai and Shenzhen-listed companies handed out a combined US$334 billion in cash dividends for 2024, up 9 per cent from the previous year, according to state media. 'The regulations and overall requirements after IPO have become stricter, in terms of reliability, transparency, or information disclosure,' said Ding Wenjie, investment strategist at China Asset Management. Reforms, however, have fallen short of transforming the market into one that prioritises investor returns. Even with the rise in share buybacks, CSI 300 companies spent only 0.2 per cent of their market value on repurchasing shares in 2024, far less than the nearly 2 per cent spent by S&P 500 firms, according to calculations by Bloomberg. The recent policy push to attract more tech listings is also a worrying sign for some investors. Regulators are resuming the listing of unprofitable companies on the STAR board, dubbed China's Nasdaq, while allowing them for the first time for the Shenzhen-based ChiNext board – which is earmarked for growth enterprises. IPOs so far this year have increased by nearly 30% from the same period in 2024. That's an inevitable move to secure capital for firms that are vital to China's battle against the US for supremacy in AI, semiconductor and robotics, but also signals that authorities may again be putting funding needs ahead of investor protection. Fast-tracking more firms to list without tackling the core problems of corporate credibility will 'just add volume without restoring investor trust,'' said Hebe Chen, an analyst at Vantage Markets in Melbourne. Stock exchange officials have been actively reaching out to investment banks and encouraging companies to file for IPOs, according to people familiar with the matter. Some high-quality tech applicants could get access to so-called 'green channels' for a faster review and approval process, the people said. 'The entire regulatory environments are still not up to the task of delivering the best out of those companies,' said Dong Chen, chief Asia strategist at Pictet Wealth Management. It requires a more comprehensive improvement of the institutional environment 'to provide the right incentives'' for companies to deliver values to their shareholders, he said. BLOOMBERG
Straits Times
2 hours ago
- Straits Times
Air Canada to resume flights after directive ending strike
Sign up now: Get ST's newsletters delivered to your inbox Air Canada's flight attendants are required to return to their duties by 2am Singapore time, a directive said. Air Canada plans to resume flights on Aug 17 after the Canadian Industrial Relations Board (CIRB) acted on a directive from the country's Jobs Minister Patty Hajdu to end a cabin crew strike that caused the suspension of around 700 daily flights. The CIRB directed Air Canada to resume operations and for all Air Canada and Air Canada Rouge flight attendants to return to their duties by 2pm Eastern time (2am Singapore time), the airline said in a statement. The directive came after the government on Aug 16 moved to end the strike and require binding arbitration to break a contract impasse, an action that the country's largest carrier had sought but unionised flight attendants fiercely opposed. Thousands of Air Canada cabin crew walked off the job on Aug 16 for the first time since 1985, after months of negotiations over a new contract. In anticipation of the stoppage, the airline began cancelling flights on Aug 15 , forcing more than 100,000 travelers to scramble for alternatives or stay put. Air Canada said flights would restart on the evening of Aug 17, but some would still be cancelled over the next seven to 10 days as the schedule stabilises and returns to normal. REUTERS
Independent Singapore
4 hours ago
- Independent Singapore
‘Drivers helped build this company, and now… drivers no longer partners?' — PHV drivers react to Grab investing in WeRide to bring robotaxis to Southeast Asia
SINGAPORE: Step aside, human drivers. Your new colleague doesn't need sleep, snacks, or small talk. Grab, Southeast Asia's ride-hailing juggernaut and reigning superapp, has just made a Press Release announcement of a strategic equity investment in Chinese autonomous driving giant WeRide . The move, also revealed in a joint announcement reported by Tech in Asia, is aimed at rolling out Level 4 robotaxis and autonomous shuttles across Southeast Asia — and possibly reshaping urban transport as we know it. That's the future knocking. Robotaxis. In Southeast Asia. The region that's famous for chaotic traffic, street food stalls in the fast lane, and grabby Grab drivers (pun intended). What's level 4 autonomy? Level 4 means the vehicle can drive itself without human input — in specific conditions or geofenced areas. No driver's hands. No nervous brake-pumping. Just sensors, software, and sophisticated artificial intelligence (AI). Think Tesla, but with less hype and hopefully fewer exploding batteries. According to WeRide 's CEO, Dr. Tony Han, their vision is ambitious: 'WeRide's vision for Southeast Asia is to deploy thousands of Robotaxis across the region, through a progressive rollout aligned with local regulations and societal readiness.' And who better to partner with than Grab, whose app is already embedded into the daily life of millions from Singapore to Jakarta? But are Southeast Asia's roads ready for it, anyway? While WeRide has proven itself in China and the Middle East, Southeast Asia presents a unique challenge — and perhaps a reality check for any AI-driven vehicle. The potholes have personalities. Motorbikes don't obey lanes. And crossing pedestrians, sometimes they don't even walk — they glide between cars like action movie stars. But Grab seems confident. 'We look forward to working with WeRide to extensively test their vehicles across diverse Southeast Asian environments,' Tan said. And if those tests pass, you might be hailing your next ride in Singapore or Malaysia only to be greeted by… well, no one, except for a screen and a robotic voice. Not all PHV drivers are on board (literally or figuratively) with the idea, though Reactions among current Grab drivers have been… mixed. In the Professional PHV Drivers Singapore group, comments ranged from sceptical to savage: 'If SEA governments are smart, don't let them come in. Don't create unemployment like what China is facing now,' warned one. 'Robotaxi… Grab takes 100% fare… pays tax to the government… this will be the future. It's only a matter of time…' another made a reminding statement. 'Drivers helped build this company, and now… Cross the bridge and dismantle it,' read one frustrated comment. And another, probably in fear of what the future holds for PHV drivers, nervously asked: 'Are drivers no longer partners?' It's clear that while Grab is painting a picture of coexistence between man and machine, some drivers feel they're being left at the kerb. When superapp and superbrain join forces… Grab's investment is set to close by the first half of 2026, pending all the usual due diligence and timing preferences from WeRide . But beyond the money, this partnership is all about tech and traction. Together, the two companies plan to: Integrate WeRide's AV tech into Grab's ride-hailing network Collaborate on fleet management, dispatch, routing, and remote monitoring Train and upskill Grab's driver-partners for new high-value roles in the AV sector (translation: not firing them… if they're willing to upgrade themselves) According to Grab CEO Anthony Tan: 'We believe AVs can complement our driver network and be deployed in cities with significant driver shortages.' That's corporate speak for: 'We're not replacing you… We're augmenting you.' (This is the part you still get nervous glances from human drivers.) The big picture: Why does this matter if it works… or not Autonomous vehicles aren't just about tech innovation — they're about how societies evolve around it. Grab 's move is part of a global trend, but its implementation in the diverse, developing, and sometimes unpredictable cities of Southeast Asia will be a true litmus test. If it works, robotaxis could: Reduce accidents (no more road rage or sleepy drivers) Provide 24/7 access in underserved areas Ease the pressure from driver shortages Create new jobs in AV maintenance, fleet ops, and supervision But if it flops, expect traffic chaos… and similar viral TikToks again. From MOU to major milestone If this sounds sudden, it's not. The deal builds upon a March 2025 Memorandum of Understanding, where both companies agreed to explore AVs' feasibility in the region. Less than a year later, that idea has gone from handshake to headline. Behind the scenes: A whole lot of geeky integration The Grab–WeRide collaboration is not just a front-end show of flashy AVs. Under the hood, it's a full-stack marriage of hardware, software, and cloud infrastructure. The partnership will work on: Dispatch & Routing: Matching cars with riders using AI, not fingers Matching cars with riders using AI, not fingers Uptime Maximisation: Charging, maintaining, and keeping those bots rolling Charging, maintaining, and keeping those bots rolling Safety Performance: Because dodging street animals and unpredictable GrabFood riders takes skill Because dodging street animals and unpredictable GrabFood riders takes skill Remote Monitoring: Teleoperations to handle emergencies when a robot doesn't know what to do Teleoperations to handle emergencies when a robot doesn't know what to do Customer Support: Because even AI needs help when it ends up in the wrong neighbourhood Because even AI needs help when it ends up in the wrong neighbourhood Human Upskilling: Through WeRide 's AV training programs and GrabAcademy's career modules In short, this isn't just a pilot project — it's a long game to redefine what 'ride-hailing' means in the age of AI. So what happens next? The road ahead is long (and full of roadblocks), but with this investment, Grab and WeRide are officially driving in the same direction. And whether you're a tech geek, a nervous driver, or just someone who hates small talk during a ride, the future of mobility in Southeast Asia just got a major update. So for now, buckle up — or don't, your next autonomous car ride might just do that for you. In other news, unlike robotaxis—which don't take things personally or throw a tantrum over passengers' air-conditioning requests—one human PHV driver did otherwise. When his passenger asked to 'increase the air-con,' the driver, clearly not in the mood for thermostat diplomacy, snapped with a sharp: 'Go ahead and get out!' Let's just say: AI may lack emotions or feelings, but at least it won't yell at you. Catch the full real-life PHV drama over here: 'Get out! Get out! This is my car; I'm asking you to get out!' — Tada driver ejects passenger for asking to 'increase air-con speed'
