Strata-titled malls lose out to glitzy new retail centres
Older premises suffer from poor maintenance and lack of promotion, say businesses
By Jessica Lim & Ng Kai Ling
IN DECLINE
'Sometimes we have zero customers. Promotions for the mall are so bad. You talk about Orchard Plaza, no one knows where it is. The mall is also poorly maintained. There are cockroaches everywhere.'
Mr Jeffrey Liew, owner of Letona Departmental store in Orchard Plaza. His complaint was echoed by Mr Mark Chainani, above, the manager of Modella Tailors in the same mall, who said business has been slow recently.
-- ST PHOTO: TED CHEN
STRATA-TITLED malls are suffering, shabby cousins to glitzy new shopping centres such as Knightsbridge and Ion Orchard that have sprung up in Singapore's shopping belt recently.
Retailers at such malls - including Orchard Plaza, Far East Plaza and Midpoint Orchard - say business has dropped by up to half compared to a year ago.
The store units in strata-titled malls are owned by individual owners who often rent out the spaces. Most malls here have one owner who manages everything from renting out the shop units to promoting the mall.
At Far East Plaza, 12 out of about 120 shops at level one - which is targeted at youth - are up for lease, and at least two have been vacant for about a year.
Tenants there say that since the new malls opened last year, business has fallen by up to 30 per cent.
Midpoint Orchard also reports similar losses. Resan Boutique, which offers tailoring services and sells jewellery, collects $1,500 a month - down 30 per cent from a year ago. Its owner, Ms Soh Li Wah, 60, blames this on increased competition from other malls.
The situation seems even more dire over at Orchard Plaza, which has a mish-mash of businesses that include massage parlours, tailoring shops and sundry shops.
At SGMobile - a mobile phone shop on the ground floor - daily turnover has dropped to $500 from $1,000 last year, said its owner, who wanted to be known only as Danny.
He said he has seen a sharp decline in the number of tourists in the area this year.
'This place cannot compare to the spiffy new malls in the area. We can barely cover rent,' he said, adding that he will be moving out next year. His monthly rental is a four-figure sum.
It is the same at Letona Departmental store, also in Orchard Plaza.
The owner of the electronics store, Mr Jeffrey Liew, 51, said business has dropped by half.
'Sometimes we have zero customers. Promotions for the mall are so bad. You talk about Orchard Plaza, no one knows where it is,' he said.
'The mall is also poorly maintained. There are cockroaches everywhere.'
Business is also bad at two other strata-titled malls The Straits Times visited - Far East Shopping Centre and Tanglin Shopping Centre.
The latter will be put up for collective sale at the end of this month, with a reserve price of $1.25 billion.
Retail experts say that poor maintenance and the lack of promotion plague most strata-titled malls, which were built in the 1970s and are slowly being phased out except for a handful.
Senior lecturer Sarah Lim, from Singapore Polytechnic's business school, said: 'When it comes to promotional activities, it is difficult to get all the individual owners to participate.
'And when it comes to maintenance and upgrading, there are so many different opinions on which maintenance company to hire and how much each tenant should come up with.'
Mr Charles Yue, a property agent who handles the rent and sale of shops at Far East Plaza, agreed.
'Strata-titled malls are not coordinated well, as individual owners act for their own self-interest,' he said.
For example, Far East Organization owns a 46 per cent stake in Far East Plaza, with the rest of the 54 per cent or some 600 shops shared among some 550 individual owners.
Tailor Ali John, who has been at Far East Shopping Centre for 30 years, said: 'The landlords are reluctant to do anything because they can still collect rent.'
He said he pays close to $5,000 a month for his 300 sq ft unit on the mall's second floor.
What this means for such businesses is that they have to think smarter and work harder to bring in customers.
At Golf & Leisure at Far East Shopping Centre, the shop tries to win over regular customers by carrying niche brands and offering good service.
The shop, which opened six years ago, has since expanded from one unit to three.
'We cannot depend on walk-in customers; at least 80 per cent of our customers are regulars,' said retail manager Michele James.
Over at Midpoint Orchard, bead shop Purple Beads pulls in regular customers by offering classes. 'Look outside, it is so run-down. But we are unaffected because our regulars always come back,' said owner Nancy Law.
Nonetheless, in the long term, the owners of these shop units will have to do more to survive.
Lecturer Ms Lim said that owners of units in these strata-titled malls should 'get together, form a committee and discuss ways to position themselves as a mall'.
She said: 'They should decide what to do in the long term, what kind of customer they want to target and then set up a calendar of events to reach out to this market.'
limjess@sph.com.sg
kailing@sph.com.sg
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