Just three years after its opening, questions are being asked about the business model of Wheelock Properties’ luxury Scotts Square Singapore shopping centre.
The compact but glitzy mall opened in 2012 on the site of the demolished Scotts Shopping Centre. It sits off Orchard Rd, between Tangs department store and the Grand Hyatt five-star hotel.
This week, at least 10 tenancies were vacant, leaving 28 open in the 75,000sqft mall, according to a report in the Straits Times newspaper.
Luxury watch store Sincere Fine Watches has moved out of its street-front space on the first and second floor, joining Ginza Sushi Ichi and Arossa Wine & Grill, which shut their doors on Jan 31. Apparel chain Bread & Butter and Malaysian cafe Delicious had already moved out. Anne Fontaine, Kiton and Marina Rinaldi will move out this month in what the newspaper described as “an exodus”.
Wheelock Properties group GM of marketing Stephanie Tay, was trying to put a positive spin on the move, saying some current tenants were due to renew or complete their leasing term. “This gives us the opportunity to tweak our tenant mix and refresh our offerings,” she told the Straits Times.
However her employer had already publicly conceded the centre was failing to perform. Late last month, Wheelock Properties announced it had written down the book value of the mall by 17 per cent to reflect “poor business conditions” – from S$312 million to $260 million.
“Scotts Square is operating under very challenging circumstances as a boutique mall,” the listed company said in a stock exchange announcement. “A substantial tenant and trade mix revamp is underway for the mall and reduction of rental revenue is expected for the initial years,” it said.
The company maintained that at the end of December – before the trickle of exits became an exodus – Scotts Square had an overall occupancy rate of 88 per cent and an average monthly rental of S$16 per square foot.
The Straits Times quoted a sales assistant at fashion brand Paul & Shark describing the mall as “quite empty”.
“We get maybe 20 walk-ins a day, but we can sell to about five.”
Scotts Square Singapore comprises three levels of retailing and a FairPrice Finest supermarket in the basement, largely serving the residents of the 43 storey apartment tower above it.
The mall’s undoing would appear to be the market positioning of its offer. With neighbouring shopping centres catering for mid-range shoppers – and the largest on Scott Rd best described as an entry level destination – there simply isn’t the foot traffic for a mall with lesser known luxury brand tenants.
The survivors – for now – include US fashion brand Michael Kors, shoe chain On Pedder and Wild Honey, a restaurant.
