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Category: Real Estate

Retail News Asia is committed to providing both local and global retailers with the latest Real Estate news throughout the Asian market. This on a daily base.

  • Lotte forecasts to double e-commerce sales by 2023

    Lotte forecasts to double e-commerce sales by 2023

    South Korean retail conglomerate Lotte is expanding its e-commerce offering with one-hour delivery grocery services, as part of a plan to double online sales by 2023.

    The rush grocery delivery service is paired with upgrades to the firm’s product recommendations system in a move to attract higher volumes of online purchases in a market increasingly shifting to internet buying.

    Lotte is currently targeting a doubling of last year’s e-commerce sales levels to KRW20 trillion (US$16.3 billion) by 2023.

    As part of the upgrade, the firm will merge its seven online operations onto a single platform – combining convenience stores, pharmacies and department store trading with its supermarket and electronics businesses. Lotte will collect sales figures for more than 20 million SKUs under the system going forward, which will serve to improve its product recommendation algorithms.

    Rush deliveries are commencing in Seoul for rollout to other areas within the territory later on.

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  • Mitsukoshi eyes first quarterly loss in eight years

    Mitsukoshi eyes first quarterly loss in eight years

    Japanese department-store chain Isetan Mitsukoshi is likely to report its first loss over a single financial quarter in eight years, according to Asia Nikkei.

    Losses of ¥5–10 billion (US$46.6–93.2 million) are expected to reflect the impact of the coronavirus pandemic that has seen most Japanese consumers remaining at home during mall operating hours.

    The loss is a steep decline from the firm’s profits of ¥3.7 billion ($34.5 million) recorded during the same period last year.

    Isetan’s department stores were hit with a 7-per-cent drop in sales during January that ballooned to 16 percent in February, and 40 percent in March as Japan’s Covid-19 lockdown intensified.

    Prospects for the retailer remain unclear, as it is yet to be seen if and how rapidly customer behavior will return to normal following the pandemic. In preparation for an uncertain period, the firm has been stocking up on cash and is currently negotiating with banks for further financing.

    Isetan rival Seiyu has reported strong retail activity following the Japanese administration’s stay-at-home request as consumers sought to stock up on food and other daily necessities. The firm has offered a special bonus of up to ¥15,000 ($140) to store workers as it now faces a staffing shortage, and is seeking 3000 new hires.

  • Sunway Malls retailers granted flexible operating hours post MCO

    Sunway Malls retailers granted flexible operating hours post MCO

    Malaysian mall operator Sunway Malls is testing a new policy to allow non-essential retailers to implement flexible operating hours following the advent of government movement control orders.

    If the one-month test proves to be effective, Sunway will extend the policy for another two months.

    The move will see participating retailers trading eight hours daily rather than the current 12, yielding a cumulative 30-day saving of 120 trading hours and allowing improved optimization of staffing arrangement from two working shifts to one.

    Market estimates show that 35 percent of tenant retailer costs arise from wages, while rent constitutes 15 percent. Savings from the move are anticipated to be equivalent to a half-month’s worth of rental costs.

    “We foresee after the resumption of business post MCO, there will be a gestation period before full recovery takes place,” said Sunway Malls and Theme Parks CEO HC Chan. “We understand too that the new normal of social distancing and absence of mass gathering will have the greatest impact for the first three months post-MCO. Taking cognizance of this, we have to accord some degree of business flexibility to our business partners.”

    Sunway Malls will continue to operate as usual from 10 am–10 pm daily.

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  • Singapore retailers call for ‘unprecedented rental relief’

    Singapore retailers call for ‘unprecedented rental relief’

    “Unprecedented rental relief measures” are needed from landlords to help retailers overcome the coronavirus crisis, according to the Singapore Retailers Association.  In an open letter to landlords, the association has urged landlords to implement a rental payment structure for six months capped at no more than 15 percent gross turnover or a 50-per-cent base rent reduction, whichever is lower. It also asks landlords to allow retail businesses who cannot sustain their businesses to exit before their lease expiration without losing security deposits or risking punitive legal action.

    “We fully realize and appreciate that both mall operators and tenants have been working very hard over the past two months to minimize the business losses from the drastic drop in footfalls,” read the letter signed by Singapore Retailers Association president R Dhinakaran, on behalf of its 400 members.

    “However with the government advice of safe distancing and stay at home (heading to malls for essentials like food only) … the sales of the majority of retail stores will be equivalent to zero sales, similar to a lockdown situation.”

    The letter asks landlords to exercise the requested measures to avoid massive permanent store closures and loss of jobs within the next three months.

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  • Many Hong Kong retail landlords rally to rent reduction call

    Many Hong Kong retail landlords rally to rent reduction call

    Landlords in premium Hong Kong retail areas are proving flexible on rents as retailers experience an unprecedented drop in sales of between 50–80 percent during the first financial quarter this year.

    Figures from real estate firm Savills show multiple mall landlords are offering temporary rent relief of 30 to 60 percent to beleaguered tenants who have faced numerous crises over the past year, of which the coronavirus outbreak is the latest. However, some shopping-center landlords are proving reluctant to relieve rents despite growing tenant vacancies.

    Retail rents in the region fell 14 percent quarter on quarter and by an average 43 percent year on year.

    “A hardening local situation combined with a lack of visibility is giving rise to a wide range of reactions to the current crisis from landlords and tenants,” said Savills research & consultancy senior director Simon Smith. “But on a more positive note, the lower rental costs will attract newcomers to the Hong Kong market, which for too long has changed the world’s highest occupational costs.”

    “As far as we can see, vacancies are expected to rise over the next six to 12 months,” said Savills MD Nick Bradstreet, “which will put more pressure on rents over the rest of the year.”

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  • Thailand’s Central Pattana to waive the rent for retailers

    Thailand’s Central Pattana to waive the rent for retailers

    Thai retail property developer Central Pattana is to waive rent for tenants affected by the government’s shutdown order.

    The company said in a statement that it will waive the rent for tenants who have been ordered to shut by authorities and offer rent reductions ranging from 10 percent to 50 percent for stores that remain open.

    “We are confident that with complete cooperation from all parties we will overcome this challenge together,” said Precha Ekkunakul, president and CEO of Central Pattana. “We are ready to support every business to resume its normal operations and to help coordinate government aids for all sectors who have been affected during this crisis.”

    The company has also organized call centers, pick-up counters and drive-through pickup points to support its food-and-beverage partners and customers.

    Central Pattana said it plans to adjust its upcoming projects and is working on a plan to resume business operations after the crisis is resolved, in order to ensure its growth and return shareholders’ investment.

    Central Pattana has temporarily closed all of its 15 shopping centers in Bangkok and 13 out of 18 shopping centers in the provinces. Essential services including supermarkets, pharmacies and convenience stores remain open during the closure.

  • IDS opens giant Singapore flagship

    IDS opens giant Singapore flagship

    Aesthetic clinic IDS has launched a flagship on Singapore’s Orchard Road, its largest facility yet.

    At 4240sqft, the brand’s first flagship outlet separately houses IDS Aesthetics, an IDS Clinic and an IDS Skincare retail outlet on the second floor of International Building.

    The brand has been absent from Orchard Road, where it was originally set up at Novena Specialist Centre, for six years.

    The outlet is conceived as a first step towards creating a one-stop clinic, where doctors with various specialty areas of interest can offer treatments to clients and customers can purchase retail products.

    The facilities feature a 2840sqft medi-spa arm with 11 treatment rooms and a comprehensive retail display of IDS Skincare’s product range, as well as a powder room and a skincare dispensary.

    Upon arrival, customers are greeted in an expansive lounge where IDS therapists offer in-depth consultations on skin and lifestyle needs before they are shown to their private treatment rooms.

    Post-treatment, guests are invited to lounge on the sofas and snap some Polaroids with their friends for the IDS Wall of Fame. The entire IDS Skincare and its Prestige range stands on display in the lounge area.

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  • Isetan Mitsukoshi closing down Ebisu department store

    Isetan Mitsukoshi closing down Ebisu department store

    Isetan Mitsukoshi is to close its 26-year-old Ebisu department store next year after failing to turn around mounting losses.

    The downtown Tokyo store will close in March or April and the company will redeploy all of its staff to other stores.

    The closure is the latest in a long string for the troubled retailer which since 2008 has reduced its network from 29 to 21. With a stagnant economy and Japan’s aging population, many large-scale retailers are finding it tough to maintain growth and some are looking offshore for opportunities.

    The company has spent two years progressively refurbishing the 18,000sqm Ebisu Mitsukoshi department store, with a special focus on its food and cosmetics departments. But the changes failed to draw enough customers to make the store viable.

    When it opened at the Yebisu Garden Place commercial center in downtown Tokyo, the store was expected to tap into a large catchment of nearby condominium residents. However, since the late 1990s, other retail developments have opened nearby, drawing customers away.

    News of the closure was broken by the Nikkei Asian Review, which says the board reached a decision this week and a formal announcement will be made by the end of this month.

    Negotiations over an orderly exit from the space have been underway for the last two years.

    “The facility has likely posted several million dollars in operating losses a year for the last two to three years,” Nikkei reported.

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  • Malls in India seek government aid during shutdown

    Malls in India seek government aid during shutdown

    Malls in India affected by the coronavirus outbreak are seeking a bailout from the government to compensate for losses incurred during a mandatory shut down period through to March 31.

    The decision has affected both retailers and developers in the various states that have implemented the ban on trading during the affected period in a bid to slow the spread of the virus.

    “A shut down like this effectively means that there are all kinds of expenses to be borne by everybody; malls may not get rent and would not be able to service loans they have taken for creation of the mall, capital expenditure, etc,” said Retailers Association of India CEO Kumar Rajagopalan in a report. “It’s all going to be a big loss. The government needs to look into this and support these entities to save lakhs of jobs”.

    A representative body for malls in India is seeking a lending window, a moratorium on loan repayments or to allow banks to reschedule debt, as well as a potential waiver of property tax and electricity charges.

    Industry experts have expressed skepticism that footfalls will return to normal within the next few months no matter how brief the shutdown period may be, which is likely to impact rental negotiations for retailers, as well as the deferment of new mall openings.

    Observers of the situation have commented that any five-day halt to business will erase the month’s profits for retailers.

    “Mall operators stand to lose 20 to 25 percent of their annual revenue assuming that a rent-free period is given to retailers,” read an ICICI Securities report. “In our view, the most likely scenario is that mall operators and retailers may share the losses given that malls have now become a relationship-based business with the same retailer having presence across malls.”

  • South Korean malls remain calm and patient

    South Korean malls remain calm and patient

    Panic buying is spreading like wildfire among a number of countries as fear of the coronavirus deepens.

    But large shopping malls in South Korea, however, are as peaceful as in the pre-coronavirus era.

    Experts argue that prior experiences in dealing with various epidemics, such as Severe Acute Respiratory Syndrome (Sars) in 2003 and Middle East Respiratory Syndrome (Mers) in 2015, has allowed retailers to maintain a stable supply of everyday necessities at shopping malls.

    Rapid technological advancement in online delivery and distribution systems thanks to the fierce competition among retailers has also helped maintain supply despite the surge in demand, some argue.

    “Despite the coronavirus outbreak, we are maintaining a delivery speed of half a day or one day at the latest. This is top class even on global standards,” said a source familiar with the e-commerce industry.

  • Robinsons may quit one Kuala Lumpur site

    Robinsons may quit one Kuala Lumpur site

    Singaporean department-store chain Robinsons may close one of its locations in Kuala Lumpur before its lease expires due to lackluster performance.

    The store launched a four-story 20,000sqft space in The Shoppes in Four Seasons Place less than two years ago, which has failed to live up to the firm’s expectations in terms of footfall. Its other outlet in the city has been operating since 2007.

    Robinsons has reportedly approached other department store operators in the territory to take over the space, including Parkson – which vacated its longstanding space in the neighboring Suria KLCC mall just last year.

    According to a report in The Edge, discussions between tenant and landlord are ongoing to determine the firm’s exact date of departure, which is likely to be in the third quarter this year. Robinson’s has filed widening financial losses in recent years.

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  • Hongkong Land posts record profit, despite protests

    Hongkong Land posts record profit, despite protests

    Property developer Hongkong Land has reported a 4-per-cent rise in underlying profit to a record US$1.076 billion for last year – but warned that the advent of the coronavirus outbreak will dent results this year.

    “The group’s results in 2020 will be impacted by the COVID-19 outbreak, with the performance of development properties in the Chinese mainland and the group’s retail properties expected to be most affected,” said chairman Ben Keswick.

    “The extent of the impact will be dependent on the duration and geographic extent of the outbreak. Stable contributions are expected from the group’s other businesses, although there are expected to be higher financing costs,” he said.

    In Hong Kong, where the company’s high-profile retail portfolio is centred, beneath its Central office towers, all store spaces were fully occupied and delivered “a respectable performance over the Christmas period” following several challenging months for the retail market in the city relating to anti-extradition bill protests.

    “Despite positive base rental reversions, however, the average retail rent in 2019 decreased to HK$222 per sqft from HK$233 per sqft in 2018, due to temporary rent relief and a decline in turnover rent,” the company said in a statement.

    Meanwhile, planning of the group’s 49-per-cent owned prime mixed-use retail and Grade A office development in Bangkok’s CBD, a partnership with local Central Group, continues on schedule. The development is expected to complete in 2025.

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  • Robinsons Retail down last month

    Robinsons Retail down last month

    Robinsons Retail has reported a 25-per-cent profit drop to US$75.2 million (PHP3.83 billion) last year and $18.8 million in the fourth quarter.

    However, net sales rose 22.8 percent to $3.2 billion for the full year driven by same-store sales growth of 3.4 percent. It was the first full year including the consolidation of Rustan Supercenters.

    The company blamed the profit decline on the effect of the new accounting standard PFRS16 which resulted in a net impact of $6.2 million in the fourth quarter and $19.6 million for the full year.

    Core net income excluding the PFRS16 adjustment rose by 9.5 percent to $31.4 million in the fourth quarter and 2.1 percent to $100.3 million for the full year.

    Net income post-PFRS16 was $78.7 million.

    “We have bolstered our strategic focus on data and digitalization, with our investments in Data Analytics Ventures Inc and e-commerce platforms BeautyMNL and Growsari, Inc,” said RRHI president Robina Y Gokongwei-Pe.

    “We remain optimistic because we approach technology as a means for our brands, loyalty programs, and marketing campaigns to become even more customer-centric and engaging in this new digital market.”

    Meanwhile, net sales for the fourth quarter went up by 14.4 percent to $921 million, primarily driven by the company’s drugstore network, up 7.4 percent, convenience stores up 5 percent, department stores up 4.7 percent and supermarkets at 4 percent.

  • Malaysia’s Sunway Malls delays coronavirus response

    Malaysia’s Sunway Malls delays coronavirus response

    Malaysian shopping-center operator Sunway Malls is taking an extended period to consider its position on rental rebates to its retail tenants amidst the coronavirus outbreak.

    The firm says it will follow the guidance of the Malaysia Shopping Malls Association, which has recommended a longer period of observation to fairly assess the situation.

    Sunway Malls said while retailers in Hong Kong and Singapore are seeking rental relief, their current predicament is different to that of Malaysian retailers since the rents in Hong Kong and Singapore are five-to-10-times higher than in Malaysia.

    The company also said its seven malls are largely driven by local consumption (more than 90 percent) rather than by tourist spending, so there has been less impact from fewer tourists visiting the country during the virus crisis.

    “There is no significant decrease in footfall when comparing last year’s post-festive season footfall with this year’s,” said the statement. “Sunway Malls’ statistics show that the virus outbreak had caused a slight decrease in footfall during the initial weeks, but it has since normalized and our footfall has remained stable and resilient.”

    Sunway Malls acknowledged the uneasiness caused by the virus, although described the situation as cautious rather than regressive.

    “By far, the situation in Malaysia is largely controlled, contained and relatively low in relation to other affected countries,” it said.

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  • CapitaLand boosts support for tenants due to Corona outbreak

    CapitaLand boosts support for tenants due to Corona outbreak

    Mall owner-operator CapitaLand is introducing additional support measures to its mall tenants as the coronavirus outbreak continues.

    CapitaLand has been offering flexible rental payments and a one-time rebates to its mall tenants in a targeted manner and will release a one-month security deposit to offset rental payments for this March.

    The group met with representatives from the Restaurant Association of Singapore and Singapore Retailers Association late last week to reaffirm its commitment and provide more details about its support packages, which are in addition to the Singapore government’s 15-per-cent property tax rebate.

    Some 3500 foodservice and retail tenants operating in CapitaLand malls in Singapore will benefit from the support.

    “As the operator of Singapore’s largest shopping mall network, we recognize that we will succeed only if our retail partners do,” said Capitaland Group president, Singapore & international Jason Leow. “Our commitment to build a sustainable retail ecosystem remains unwavering. We will continue to engage our tenants closely and stand prepared to do more should the situation worsen.”

    CapitaLand initially announced on February 13 a move to offer mall tenants the flexibility to operate shorter store hours. The firm has also put in place an SG$10 million (US$7.16 million) marketing assistance program to fund retailer-driven and mall-wide promotional activities to help its tenants achieve more sales.

    Andrew Kwan, VP of the Restaurant Association of Singapore, said CapitaLand’s moves were “tangible relief at a time of great need”.

    “We urge other landlords to take the cue from CapitaLand and offer urgent and immediate cost-relief measures for their tenants. Only when all parties work together can we save jobs during this difficult time.”

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