The falling rental rates provide a silver lining for online retailers amid the current retail slump.These retailers have a chance to venture offline and into shopping malls. Last month, for example, online furniture retailer HipVan opened its permanent 11,000 sq ft flagship store at The Cathay in Dhoby Ghaut.
Lifestyle retailer Naiise similarly opened its 8,500 sq ft flagship store in that mall last June. Other online retailers, such as Reebonz, Love Bonito and Ohvola, have opened short-term stores in Suntec City and Orchard Gateway, to catch shoppers who want to see, touch or try on a product before buying.
The islandwide vacancy rate for retail space was 7.5 per cent at the end of last year, up from 4.5 per cent at the end of 2013, Urban Redevelopment Authority (URA) data showed.
The Median rental rate per sq ft per month for the Orchard Road area is $9.82, the first time it fell below $10. The median rental rate for retail space in the third quarter of last year was the lowest on record.
The median rental rate for retail space in the third quarter of last year was the lowest on record, falling to $9.82 per sq ft per month for the Orchard Road area – the first time it fell below $10, according to URA data.
Naiise has five other stores in malls such as Westgate and 112 Katong, which offer self-collection services for online orders. Its online plus offline strategy has paid off, with its six retail stores combined now generating more revenue than its online store.
HipVan co-founder Danny Tan, 33, said the retail slump has benefited his business, which now occupies the space formerly rented by sportswear brand Adidas. The store is seven times larger than HipVan’s previous pop-up space in Millenia Walk and Suntec City. It features more than 1,000 of HipVan’s bestsellers, including beds, dining tables and rugs. Its website attracts 200,000 to 300,000 views a month, while revenue has been growing by 12 per cent on average every month.
Meanwhile, high-end fashion retailer Reebonz, whose lease for its pop-up boutique in Suntec ends next year, is moving into its own eight-storey building in Tampines this month. The building will house a permanent showroom.