Singapore retail landlords need to embrace digital channels as e-commerce booms
This is despite the prediction for overall retail occupancy to remain high.
Singapore’s REITs face an uphill battle as e-commerce continues to stay strong, according to a report released by S&P Global Ratings. If the landlords fail to adapt, lower occupancy, revenue, and ratings can follow.
This comes as the number of those switching to e-commerce is expected to grow, according to S&P Global Ratings Credit Analyst Yijing Ng.
“We believe consumers' gravitation toward e-commerce will continue. Retail landlords will need to enhance their value proposition to both retailers and consumers to stay relevant.”
During the circuit breaker period from 7 April 2020 to 1 June 2020. The proportion of online retail sales to total retail sales was more than three times higher than the pre-pandemic level.
Suburban retail landlords are also expected to perform better when compared to city-centre landlords, as their tenant mix and closeness to work-from-home professionals are expected to benefit them.
Whilst the overall retail occupancy is expected to remain high at more than 95% through the next six to 12 months, the report believes that REITS should focus on the strategies used to maintain their competitive advantage and operating performance in the post-COVID-environment.