Exploring flexible leasing in Singapore malls

September 2, 2019 / By  

As retail competition heats up in Singapore, a few retail landlords are exploring flexible leasing concepts to create fresh experiences regularly for shoppers.

CapitaLand is exploring this concept in 20 “plug and play” retail pods in Tree of Life at the newly opened Funan in the CBD. Established and emerging retail brands are curated to align with the mall’s themes before being offered a flexible lease, as short as one month, on the pods of varying sizes.

Some of the brands showcased at Tree of Life include home-grown artisan jeweller Carrie K; chic leather shoemaker Another Sole; and a tech media studio, The pods are also open for bookings to host classes, workshops and community engagement events. The short lease terms and the hosting of events enable CapitaLand to introduce new retail brands and concepts and varied experiences regularly to shoppers and elicit subsequent visits to Funan.

SPH Reit is exploring a similar flexible leasing concept in a dedicated area on the third floor of Paragon, a luxury mall along Orchard Road. Previously housing boutiques, the area is now carved into “plug and play” booths of varying themes and sizes, available on flexible, short-term leases to curated upmarket brands with a similar affluent shopper profile.

The area hosts home-grown fashion brand SABRINAGOH; lifestyle swimwear retailer, K.BLU; a trendy food café-cum-bar, Halcyon & Crane; and jewellers SuLin Serio and Daughter Diamond, which produce one-off designs and bespoke pieces. These emerging brands inject a contemporary feel to Paragon, as well as add variety to the offerings of long-established upmarket brands on longer leases at the mall. The short-term leases also allow SPH Reit to introduce fresh retail concepts regularly to the affluent shoppers and, in the process, entice frequent visits to Paragon.

Flexible leasing is not new in Singapore. Wheelock Group is an early adopter, introducing the concept at Scotts Square in Orchard in 2015. The landlord configured the entire second floor space to a multi-concept store operated by Pedder on Scotts, a luxury multi-brand footwear and accessories retailer that shares the same parentage as the mall. The store offers affluent shoppers a wide array of curated luxury and contemporary designer products in a footprint of fixed or specially carved out areas uniquely developed and designed for product display according to clusters. The flexibility promotes the creative use of space, injecting a trendy edge to this luxury mall while creating variety for shoppers, and refreshing the luxury mall regularly with new brands and offerings.

Currently, few landlords have adopted flexible leasing and only in selected malls as there are associated risks. The concept involves capital commitment and could compromise a mall’s short-term revenue stream.

Flexible leasing, however, could become more widely adopted. Well curated and managed, flexible leasing could inject variety in the mall offerings, dispelling the “cookie-cutter” image of malls in Singapore. It could create new experiences regularly for shoppers, providing a reason for more frequent visits to a mall that could lead to improved overall performance.

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