Sunday, November 05, 2017

Poor prospects for retail

My friend told me that a new shopping mall with 60 shops opened in Bukit Timah Road two months ago. Right now, only 1 or 2 shops have started business.

This is similar to what is happening in Flora Vista near my home. They have 31 shops and appeared to be ready some time ago.

None of the shops have started business yet. I do not see any of the units being renovated to get ready for business.

They have a big banner asking interested tenants to call their hotline. I called that number but nobody picked up the phone. I tried a few times over 1 hour, but still no luck.

The residential units are all sold out. Many people think that property will always go up in price, due to shortage of land and other reasons. They put in all of their savings, and future savings, on this belief.

But it is a different matter with commercial properties. They have to pay the rent and other expenses every month. They know that they cannot make it. So, the shops and F&B outlets remain empty.

It is time for landlords and developers to realize the problem and bring down the rentals of these shops to a level that can sustain a business. So far, most of them are unwilling to do so. They prefer to maintain the high rentals and leave the units empty They are able to hold on, as interest rate on their loans are still quite low.

But, things may change.


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