How the performance of Singapore’s malls is measured is becoming increasingly important given the current Covid19 pandemic. In this paper we examine different ways of thinking about the financial performance of malls and we explain why focusing on tenant sales is so important.
Our analysis highlights 6 key strategies that will provide landlords with a far deeper understanding of their mall, which will help them navigate this turbulent period:
1. FORGET RENT, FOCUS ON SALES AND OCRS. Only by focusing on sales and Occupancy Cost Ratios (OCRs) can you understand the strength and the sustainability of your income.
2. UNDERSTAND WHERE YOUR SALES COME FROM. A 3 km radius is not a trade area – shoppers don’t follow such cartographic definitions. Use mobile phone data or surveys to understand who your shoppers are, where they live, and what their preferences are.
3. FIND GAPS IN THE MARKET. Landlords often think about gap analysis in terms of tenants. But we suggest first looking at your market, and finding the markets (locations, cohorts) that you are not penetrating. Then think about tenants that will penetrate these markets.
4. BENCHMARK, BENCHMARK, BENCHMARK. The Singapore retail market remains highly opaque compared to many other global markets. This holds the market back. Understanding how your tenants are performing is critical to optimising a malls performance, and this can only be done with effective benchmarking that looks beyond your own portfolio.
5. A MALL IS A PARTNERSHIP. A mall is more than the sum of its parts. Tenants and landlords must work together, sharing the risk and reward of their collective effort.
6. THINK ABOUT THE FUTURE. Sales, unlike rent, can be directly attributed to shoppers – the population, how much they spend, their preferences. As such, with the right analytical framework, the sales performance of mall can be forecast, scenarios can be tested and the outlook better understood.
Want to know more about how Cistri can help optimise the performance of a mall? Click here to read our full analysis or speak to us today.