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Publication The Straits Times
Date 1 September 2016
Headline Reit sector unfazed by tech disruption
By Marissa Lee
More consumers are going online to look for value
buys but famous shopping strips like London's
Bond Street, Tokyo's Ginza and New York's Fifth
Avenue are not disappearing either.
The brick-and-mortar endorsement came
yesterday from Mr Ho Sing, chief executive of YTL
Starhill Global Reit Management, who told a forum
the threat of e-commerce to Orchard Road is
"overrated".
He was one of four Reit managers who gave their
views on the challenges faced by the different real
estate investment trust (Reit) sub-sectors in
Singapore.
E-commerce is widely expected to have a
disruptive impact on retail landlords, but Mr Ho is
less concerned. He said: "When we try to mitigate
this online shopping thing, actually we don't need
to do much... It's the value shopper that goes
online most of the time."
He noted that necessity spending will continue to
prop up suburban malls, and people tend to buy
higher-value items online only if they cannot be
found in Singapore. In fact, online shopping has
boosted retail overall, said Mr Ho, because it has
educated the consumer.
Mr Koh Wee Lih, chief executive of Aims AMP Capital Industrial Reit, told the event hosted by Macquarie
Securities: "Whether you buy from a retail outlet or online, the fulfilment is probably cleared out by a
warehouse, so we benefit regardless."
Meanwhile, the rising popularity of Airbnb and other room-rental booking sites has put pressure on the
hospitality sector.
But Mr Ronald Tay, chief executive of Ascott Residence Trust Management, feels the effect on his Reit
is less immediate for now.
"Airbnb is a disruptor, we acknowledge that. But Ascott Reit is more focused on corporate travel vis-a-
vis leisure travel," he said, noting that 85 per cent of the Reit's business in Asia comes from corporate
travel, and corporates typically do not book rooms on Airbnb.
Airbnb and Ascott's serviced apartments are competing on different price points as well, he added.
Singapore is the third-biggest Reit market in the Asia-Pacific region after Japan and Australia, with S-
Reits trading at an average yield of 6 per cent, offering the highest yield spread in developed Asia.
But the Singapore Reit, or S-Reit, sector has slowed down since the first Reit was listed in 2002.
"From 2002 to 2007, you probably saw about 7 per cent to 8 per cent growth in distribution per unit
(DPU) and 4 per cent growth after the great financial crisis," said Mr Tuck Yin Soong, executive director
of Macquarie Securities Singapore. Macquarie is forecasting DPU growth of about 0.2 per cent per
annum in the next two years.
And competition is brewing - the Philippines, Indonesia and India are pushing towards establishing their
own Reit regimes.
But Ms Ng Hsueh Ling, chief executive of Keppel Reit Management, pointed out that it takes time to
build a Reit market.
"Good laws and regulations, no capital controls, no cash trap... these are things that make or break a
Reit market," she said.
Separately, market talk has been that mergers and acquisitions could be a trend to watch in the S-Reits
sector.
Mr Tay said: "I think consolidation is something that is going to be inevitable. A lot of institutional
investors look at (trading) liquidity and size, and some (Reits) are not quite there. Consolidation is not
necessarily a bad thing from an industry point of view."
Publication The Straits Times
Date 1 September 2016
Headline Reit sector unfazed by tech disruption
By Marissa Lee
URL http://www.straitstimes.com/business/reit-sector-unfazed-by-tech-disruption
E-commerce threat to Orchard Road and suburban malls overrated, says one manager
More consumers are going online to look for value buys
but famous shopping strips like London's Bond Street,
Tokyo's Ginza and New York's Fifth Avenue are not
disappearing either.
The brick-and-mortar endorsement came yesterday
from Mr Ho Sing, chief executive of YTL Starhill Global
Reit Management, who told a forum the threat of e-
commerce to Orchard Road
is "overrated".
He was one of four Reit managers who gave their views
on the challenges faced by the different real estate
investment trust (Reit) sub-sectors in Singapore.
E-commerce is widely expected to have a disruptive
impact on retail landlords, but Mr Ho is less concerned.
He said: "When we try to mitigate this online shopping
thing, actually we don't need to do much... It's the value
shopper that goes online most of the time."
He noted that necessity spending will continue to prop
up suburban malls, and people tend to buy higher-value
items online only if they cannot be found in Singapore.
In fact, online shopping has boosted retail overall, said
Mr Ho, because it has educated the consumer.
Mr Koh Wee Lih, chief executive of Aims AMP Capital
Industrial Reit, told the event hosted by Macquarie
Securities: "Whether you buy from a retail outlet or
online, the fulfilment is probably cleared out by a
warehouse, so we benefit regardless."
Meanwhile, the rising popularity of Airbnb and other
room-rental booking sites has put pressure on the
hospitality sector.
But Mr Ronald Tay, chief executive of Ascott Residence
Trust Management, feels the effect on his Reit is less
immediate for now.
"Airbnb is a disruptor, we acknowledge that. But Ascott
Reit is more focused on corporate travel vis-a-vis leisure
travel," he said, noting that 85 per cent of the Reit's business in Asia comes from corporate travel, and
corporates typically do not book rooms on Airbnb.
Airbnb and Ascott's serviced apartments are competing on different price points as well, he added.
Singapore is the third-biggest Reit market in the Asia-Pacific region after Japan and Australia, with S-
Reits trading at an average yield of 6 per cent, offering the highest yield spread in developed Asia.
But the Singapore Reit, or S-Reit, sector has slowed down since the first Reit was listed in 2002.
"From 2002 to 2007, you probably saw about 7 per cent to 8 per cent growth in distribution per unit
(DPU) and 4 per cent growth after the great financial crisis," said Mr Tuck Yin Soong, executive director
of Macquarie Securities Singapore. Macquarie is forecasting DPU growth of about 0.2 per cent per
annum in the next two years.
And competition is brewing - the Philippines, Indonesia and India are pushing towards establishing their
own Reit regimes.
But Ms Ng Hsueh Ling, chief executive of Keppel Reit Management, pointed out that it takes time to
build a Reit market.
"Good laws and regulations, no capital controls, no cash trap... these are things that make or break a
Reit market," she said.
Separately, market talk has been that mergers and acquisitions could be a trend to watch in the S-Reits
sector.
Mr Tay said: "I think consolidation is something that is going to be inevitable. A lot of institutional
investors look at (trading) liquidity and size, and some (Reits) are not quite there. Consolidation is not
necessarily a bad thing from an industry point of view."
Publication The Business Times
Date 1 September 2016
Headline Singapore Reits hitting their limit over compliance rules
By Lee Meixian
Singapore real estate investment trust (Reit)
managers believe the stricter rules that kicked in
for the sector this year have raised the Republic's
Reit hub status. But they are quick to add that a
breather is needed on compliance rules.
Any more, and it will be too painful to bear, and
may even result in a "diminishing returns"
situation, they say.
At a roundtable discussion organised by
Macquarie Securities on Wednesday, Reit
managers were asked for their wish list: what
changes they would like to see in the Reit code
that governs them.
Ho Sing, CEO of the manager for Starhill Global
Reit, said that the rule changes - which mostly
focus on improving disclosures, prudence and
aligning managers' interests with unitholders' -
have been "very positive" in boosting the faith that
external investors and credit ratings agencies
have in the system.
"But going forward, we do see a very significant increase in compliance costs from a legal perspective
and regulatory perspective. I have not seen it approach that point yet, but I do hope that they will not
keep adding up the compliance regime such that you get diminishing returns.
"In fact, when it goes into diminishing returns, that's when you see Reits delisting, because it is easier
to keep the yield private and enjoy it even without the tax-free (benefits) . . . my wish list is that I hope
that they monitor it to the extent that it doesn't reach that diminishing returns point."
His view was shared by the other three managers, from Keppel Reit, Ascott Residence Trust and AIMS
AMP Capital Industrial Reit, on the panel.
Ng Hsueh Ling, CEO of the manager for Keppel Reit, also took issue with the fact that Reits are put in
the same compliance and regulatory ranks as financial institutions (FIs) by the Monetary Authority of
Singapore (MAS), which again increases compliance expenses.
Banks and Reits are the only listed companies that have to abide by both MAS and Singapore Exchange
(SGX) guidelines; most others need only adhere to rules enacted by the latter.
These MAS guidelines deal with a whole gamut of issues from how Reits treat information, to how they
outsource business processes, or ensure that their service providers meet certain recovery standards.
The thinking behind this is that Reits, like banks and insurers, are deemed to be financial products as
they deal with a lot of "mom-and-pop" money, thus necessitating the added layer of protection.
Furthermore, SGX's push towards sustainability initiatives could pile on more compliance costs for S-
Reits, said Ms Ng. "My wish list is that we can make it a good environment to attract global capital, but
don't make it so prescriptive that the Reits can't breathe or move."
Ronald Tay, CEO of the manager for Ascott Residence Trust, agreed. "I really think that Reits shouldn't
be viewed in the same light as FIs. The requirements for anti-money laundering kind of compliance . . .
We don't lend money.
"Just because we all have the same licence that we are governed by, the same compliance standard,
that to me could be a little bit punishing. I don't know whether it's possible to look into slightly different
kinds of compliance that will allow us more breathing space."
Other wishes mentioned include a reinstating of the stamp duties remission for local property purchases,
vacancy rebates (such that Reits are not taxed on the vacant portion of their new buildings), and more
transparency on how taxation on overseas investments and tax structures for international investors will
move, going forward.
Publication The Business Times
Date 1 September 2016
Headline Singapore Reits hitting their limit over compliance rules
By Lee Meixian
URL http://www.businesstimes.com.sg/real-estate/singapore-reits-hitting-their-limit-over-
compliance-rules
Singapore real estate investment trust (Reit) managers believe the stricter rules that kicked in for the
sector this year have raised the Republic's Reit hub status. But they are quick to add that a breather is
needed on compliance rules.
Any more, and it will be too painful to bear, and may
even result in a "diminishing returns" situation, they
say.
At a roundtable discussion organised by Macquarie
Securities on Wednesday, Reit managers were
asked for their wish list: what changes they would
like to see in the Reit code that governs them.
Ho Sing, CEO of the manager for Starhill Global
Reit, said that the rule changes - which mostly focus
on improving disclosures, prudence and aligning
managers' interests with unitholders' - have been
"very positive" in boosting the faith that external
investors and credit ratings agencies have in the
system.
"But going forward, we do see a very significant
increase in compliance costs from a legal
perspective and regulatory perspective. I have not
seen it approach that point yet, but I do hope that
they will not keep adding up the compliance regime
such that you get diminishing returns.
"In fact, when it goes into diminishing returns, that's
when you see Reits delisting, because it is easier to
keep the yield private and enjoy it even without the
tax-free (benefits) . . . my wish list is that I hope that
they monitor it to the extent that it doesn't reach that
diminishing returns point."
His view was shared by the other three managers,
from Keppel Reit, Ascott Residence Trust and AIMS
AMP Capital Industrial Reit, on the panel.
Ng Hsueh Ling, CEO of the manager for Keppel
Reit, also took issue with the fact that Reits are put
in the same compliance and regulatory ranks as
financial institutions (FIs) by the Monetary Authority
of Singapore (MAS), which again increases
compliance expenses.
Banks and Reits are the only listed companies that have to abide by both MAS and Singapore Exchange
(SGX) guidelines; most others need only adhere to rules enacted by the latter.
These MAS guidelines deal with a whole gamut of issues from how Reits treat information, to how they
outsource business processes, or ensure that their service providers meet certain recovery standards.
The thinking behind this is that Reits, like banks and insurers, are deemed to be financial products as
they deal with a lot of "mom-and-pop" money, thus necessitating the added layer of protection.
Furthermore, SGX's push towards sustainability initiatives could pile on more compliance costs for S-
Reits, said Ms Ng. "My wish list is that we can make it a good environment to attract global capital, but
don't make it so prescriptive that the Reits can't breathe or move."
Ronald Tay, CEO of the manager for Ascott Residence Trust, agreed. "I really think that Reits shouldn't
be viewed in the same light as FIs. The requirements for anti-money laundering kind of compliance . . .
We don't lend money.
"Just because we all have the same licence that we are governed by, the same compliance standard,
that to me could be a little bit punishing. I don't know whether it's possible to look into slightly different
kinds of compliance that will allow us more breathing space."
Other wishes mentioned include a reinstating of the stamp duties remission for local property purchases,
vacancy rebates (such that Reits are not taxed on the vacant portion of their new buildings), and more
transparency on how taxation on overseas investments and tax structures for international investors will
move, going forward.
Publication The Business Times
Date 1 September 2016
Headline Partnering competitors - Reits find ways around disruption
By Lee Meixian
Real estate investment trusts (Reits) have their ways of
dealing with competition from disruptors such as Airbnb and
e-commerce, whose consumers tend to be more price-
sensitive, they say.
One way is by working with the competition. The other is by
changing their product range to not cross paths with their
disruptors'.
At a roundtable organised by Macquarie Securities on
Wednesday, CEO of the manager of Ascott Residence Trust,
Ronald Tay, said the trust has tried listing its properties on
Airbnb to see if they would garner any booking. "So far the
result is nil, zero," he said.
He believes this is because of the price point - people who
book accommodation on Airbnb tend to be leisure travellers
and bargain hunters, quite different from Ascott Reit's profile
of corporate travellers for its serviced residences.
"At this point in time, as a disruptor to our business, I would say (Airbnb) is fairly insignificant, but it is
not something we are not concerned about," Mr Tay said.
Its sponsor Ascott last year bought a minority stake in Tujia.com - dubbed China's Airbnb and the
country's largest online apartment sharing platform equivalent - to better understand how disruptors
work.
"There are ways and means that we can collaborate with them, and tap their database and business
model to also increase our business profile globally as well," he said.
Addressing the e-commerce threat, Ho Sing, CEO of the manager of Starhill Global Reit and himself an
avid online shopper, said the trust has side-stepped offerings on shopping websites by adding and
improving the food and beverage options in its malls.
"We are not selling mass market things; we are not selling S$5 burgers. Things are a little bit more
artisanal: Japanese concepts, modern concepts, even for the food court itself, we emphasise quality,"
he said.
He noted that electronics stores such as Best Denki have evolved into selling white goods and home
theatre appliances, big items that would not have been easy to transport from overseas. Being
expensive, buyers would also prefer to inspect their features in person before committing their
purchases. This is a space e-commerce will find it difficult to get into.
On the resurgence of vinyl, as people have recently begun to appreciate the quality of music again,
more are now buying vinyl records from retail stores. "They don't take the risk of the thing coming
cracked in three pieces when they buy online, so the vinyl stores have come back," he said.
At this, Koh Wee Lih, CEO of the manager of AIMS AMP Capital Industrial Reit, could not help but add:
"I'm pleased to know that whether you buy from Orchard Road or you buy from online, the fulfilment is
probably carried out by warehouses, so we'll benefit regardless."
He added that a lot of the pick-up in demand for logistics space recently has come from local companies
dealing with local deliveries of food and everyday products to retail stores and hotels. "We have actually
seen the local boys picking up the business, asking for more space from us, versus maybe the
international players," he said.
The trust has nine warehouses island-wide and is adding one more in 2017.
Publication The Business Times
Date 1 September 2016
Headline Partnering competitors - Reits find ways around disruption
By Lee Meixian
URL http://www.businesstimes.com.sg/real-estate/partnering-competitors-reits-find-ways-
around-disruption
Real estate investment trusts (Reits) have their ways of
dealing with competition from disruptors such as Airbnb and
e-commerce, whose consumers tend to be more price-
sensitive, they say.
One way is by working with the competition. The other is by
changing their product range to not cross paths with their
disruptors'.
At a roundtable organised by Macquarie Securities on
Wednesday, CEO of the manager of Ascott Residence
Trust, Ronald Tay, said the trust has tried listing its
properties on Airbnb to see if they would garner any
booking. "So far the result is nil, zero," he said.
He believes this is because of the price point - people who
book accommodation on Airbnb tend to be leisure travellers
and bargain hunters, quite different from Ascott Reit's profile
of corporate travellers for its serviced residences.
"At this point in time, as a disruptor to our business, I would
say (Airbnb) is fairly insignificant, but it is not something we
are not concerned about," Mr Tay said.
Its sponsor Ascott last year bought a minority stake in
Tujia.com - dubbed China's Airbnb and the country's largest
online apartment sharing platform equivalent - to better
understand how disruptors work.
"There are ways and means that we can collaborate with
them, and tap their database and business model to also
increase our business profile globally as well," he said.
Addressing the e-commerce threat, Ho Sing, CEO of the
manager of Starhill Global Reit and himself an avid online
shopper, said the trust has side-stepped offerings on
shopping websites by adding and improving the food and
beverage options in its malls.
"We are not selling mass market things; we are not selling
S$5 burgers. Things are a little bit more artisanal: Japanese
concepts, modern concepts, even for the food court itself,
we emphasise quality," he said.
He noted that electronics stores such as Best Denki have
evolved into selling white goods and home theatre
appliances, big items that would not have been easy to transport from overseas. Being expensive,
buyers would also prefer to inspect their features in person before committing their purchases. This is a
space e-commerce will find it difficult to get into.
On the resurgence of vinyl, as people have recently begun to appreciate the quality of music again,
more are now buying vinyl records from retail stores. "They don't take the risk of the thing coming
cracked in three pieces when they buy online, so the vinyl stores have come back," he said.
At this, Koh Wee Lih, CEO of the manager of AIMS AMP Capital Industrial Reit, could not help but add:
"I'm pleased to know that whether you buy from Orchard Road or you buy from online, the fulfilment is
probably carried out by warehouses, so we'll benefit regardless."
He added that a lot of the pick-up in demand for logistics space recently has come from local companies
dealing with local deliveries of food and everyday products to retail stores and hotels. "We have actually
seen the local boys picking up the business, asking for more space from us, versus maybe the
international players," he said.
The trust has nine warehouses island-wide and is adding one more in 2017.
Publication ReitsWeek
Date 1 September 2016
Headline Singapore REITs well-poised to weather downturn in economy, say CEOs
By Ridzwan Rahmat
URL http://www.reitsweek.com/2016/09/singapore-reits-well-poised-to-weather-downturn-
in-economy-say-ceos.html
Amid a slowing economy, Singapore REITs are generally
well-positioned to weather the downturn and adapt to
industry disruptors across sectors that they operate in,
said the CEOs of four REIT managers during a media
roundtable hosted by Macquarie Securities on 31 August.
The session was attended by Koh Wee Lih, Ronald Tay,
Ho Sing and Ng Hsueh Ling, CEOs of the managers for
AIMS AMP Capital Industrial REIT, Ascott Residence
Trust (Ascott REIT), Starhill Global REIT, and Keppel
REIT respectively.
On the industrial front, the drop in global commodities
meant some multinationals had reduced their space
needs in Singapore but there is rising demand from
Singapore companies, said Koh.
“Growing trends such as online retail has also created
new opportunities for the industrial REIT sector. Whether
you buy from Orchard Road or online, the fulfilment is
carried out by warehouses so it will benefit the industrial
sector, particularly the warehouse and logistics segment”,
he added.
Stahilll Global REIT too has said that it remains unfazed
on the growing popularity of online retail. “We remain
strong because of our prime locations and tenant mix
while catering to a differentiated segment of retail”, said
Ho.
“In fact, online shopping has actually helped Singapore retail by educating consumers on new brands
overseas, so that ups the game for retail and increases the opportunities where we can push for better
shopping experiences and new tenant mix”, he added.
With regards to demand for hospitality properties and the effects of disruptors, Ascott REIT commented
that it targets a different market segment than those who use services such as Airbnb.
“As a majority of Ascott REIT’s business is from corporate travellers, we do not see a significant impact
on our business by sharing economy providers that appeal more to leisure travellers”, said Tay, adding
that the REIT’s sponsor has also embraced the effect of disruptions by investing in Tujia, China’s largest
online apartment sharing platform.
However compliance costs remain a challenge for Singapore REITs and the CEOs have reiterated the
call for REITs to be differentiated from financial institutions in terms of scrutiny.
“I hope we maintain a good regulatory and compliance environment for attracting global capital into
Singapore REITs”, said Ng, who added that Keppel REIT remains in good stead despite the slowing
demand in office space due to a strategy of adopting forward renewals and lease extensions for existing
tenants.
Publication TODAY
Date 1 September 2016
Headline Opening of flagship stores highlight Orchard Road’s appeal
By Lee Yen Nee
URL http://www.todayonline.com/business/opening-flagship-stores-highlight-orchard-roads-
appeal
The rise of suburban malls and e-commerce may
have affected retailers on Orchard Road, but the
opening of flagship stores by international brands
here is testament that the shopping belt has not
totally lost its sheen, said the chief executive of
Starhill Global Reit.
“We will not see things like the first flagship stores
opening in suburbs. I don’t think that’s the trend …
the first landing point for most retail (brands), in any
city in the world, is the core downtown. So, the
location strength can’t change,” said Mr Ho Sing, who
was one of the panellists at a roundtable discussing
the challenges and outlook for Singapore’s real
estate investment trusts (Reits).
Japanese retailer Uniqlo will open its first South-east
Asian global flagship store at Orchard Central
tomorrow. Several others, including US lingerie
brand Victoria’s Secret, fashion house Michael Kors
and Apple, are also adding their flagship stores to the
belt.
Mr Ho said amid the challenging retail landscape,
tenant mix is key to maintaining an edge and the Reit
has been working on introducing new-to-market
brands at its malls. Starhill Global Reit’s portfolio
includes Wisma Atria and Ngee Ann City on Orchard
Road.
He added that while e-commerce has attracted
shoppers looking for value buys, many still prefer to
purchase higher value items in store. Therefore,
premium shopping destinations such as London’s
Bond Street, Japan’s Ginza and New York’s Fifth
Avenue will continue to attract traffic.
The Reit sector in Singapore, or S-Reits, has held up
despite the increasingly challenging economic
environment with a year-to-date gain of 11 per cent,
outperforming the benchmark Straits Times Index’s 2
per cent loss, noted Mr Soong Tuck Yin, executive
director of Macquarie Securities Singapore, who was
the moderator at yesterday’s roundtable.
“Since the inception of Reits from 2002 till now, the growth rates have slowed … so the environment
has been a little bit more challenging. However, S-Reits’ yield of 6.1 per cent offers the highest yield
spread in developed Asia relative to Hong Kong, Australia and Japan. Organic growth is a big challenge
(for S-Reits), so overseas expansion is a key trend in the last three to four years,” he said.
“There’s still a group of investors out there chasing yields. Secondly, post-Brexit, there’s some money
flowing from European real estate investments into Asia due to concerns over what will happen in
Europe due to the uncertainties.”
Publication ReitsWeek
Date 1 September 2016
Headline Starhill Global REIT allays concerns over popularity of online shops, suburban malls
By Ridzwan Rahmat
URL http://www.reitsweek.com/2016/08/starhill-global-reit-allays-concerns-over-popularity-
of-online-shops-suburban-malls.html
Despite the growing popularity of online shopping and
suburban malls, the manager of Starhill Global REIT
remains confident about its prospects for the years ahead,
citing the REIT’s quality of properties and tenant mix.
These remarks come amid concerns that Orchard Road,
where Starhill Global REIT’s two Singapore properties are
located, may have lost its lustre as the republic’s premier
shopping destination.
Starhill Global REIT derives 61.9% of its revenue for its 4Q
2016 from its Singapore properties.
“The key things have not changed”, said Ho Sing, CEO of
Starhill Global REIT’s manager, in reference to shopper’s
habits. “We will continue to leverage on our quality and
location strength, and our tenant mix as key drivers for the
markets that we operate in”, he added.
Ho was speaking with three other Singapore REITs at a
media roundtable organised by Macquarie Securities in
Singapore on 31 August.
In his elaboration, Ho highlighted that established
international brands will usually select a downtown
location, such as Orchard Road, to launch a flagship store
when first entering a particular market.
“You will not see a flagship store opening in the suburbs”,
said Ho, citing Apple, which will be launching its first official
retail outlet in Singapore on Orchard Road, as an example.
“Decentralisation to suburban malls happen for mass market brands. The first landing point for a more
premium brand is always the core downtown area, just like Tokyo’s Shinjuku and Ginza”, he said, adding
that Starhill Global REIT targets a similar premium market segment when selecting its tenants.
Ho also posits that Singapore is still behind shopping other destinations such as Hong Kong and Tokyo
in terms of variety in the choice of premium international brands.
“We see a lot of headroom for international brands to come in to Singapore”, he said, adding that Starhill
Global REIT’s properties, Wisma Atria and Ngee Ann City, are well positioned to tap on this demand.
Besides Singapore, Starhill Global REIT currently has a portfolio of 12 primarily retail properties in
Australia, China, Japan and Malaysia.
Units of Starhill Global REIT finished the trading day unchanged from its previous close on the
Singapore Exchange at SGD0.805.
Publication Malay Mail Online
Date 1 September 2016
Headline Opening of flagship stores highlight Orchard Road’s appeal
URL http://www.themalaymailonline.com/money/article/opening-of-flagship-stores-in-
singapore-highlights-orchard-roads-appeal
The rise of suburban malls and e-commerce may have
affected retailers on Orchard Road, but the opening of
flagship stores by international brands here is
testament that the shopping belt has not totally lost its
sheen, said the chief executive of Starhill Global Reit.
“We will not see things like the first flagship stores
opening in suburbs. I don’t think that’s the trend … the
first landing point for most retail (brands), in any city in
the world, is the core downtown. So, the location
strength can’t change,” said Mr Ho Sing, who was one
of the panellists at a roundtable discussing the
challenges and outlook for Singapore’s real estate
investment trusts (Reits).
Japanese retailer Uniqlo will open its first South-east
Asian global flagship store at Orchard Central
tomorrow. Several others, including US lingerie brand
Victoria’s Secret, fashion house Michael Kors and
Apple, are also adding their flagship stores to the belt.
Mr Ho said amid the challenging retail landscape,
tenant mix is key to maintaining an edge and the Reit
has been working on introducing new-to-market brands
at its malls. Starhill Global Reit’s portfolio includes
Wisma Atria and Ngee Ann City on Orchard Road.
He added that while e-commerce has attracted
shoppers looking for value buys, many still prefer to
purchase higher value items in store. Therefore,
premium shopping destinations such as London’s
Bond Street, Japan’s Ginza and New York’s Fifth
Avenue will continue to attract traffic.
The Reit sector in Singapore, or S-Reits, has held up
despite the increasingly challenging economic
environment with a year-to-date gain of 11 per cent,
outperforming the benchmark Straits Times Index’s 2
per cent loss, noted Mr Soong Tuck Yin, executive
director of Macquarie Securities Singapore, who was
the moderator at yesterday’s roundtable.
“Since the inception of Reits from 2002 till now, the
growth rates have slowed … so the environment has
been a little bit more challenging. However, S-Reits’
yield of 6.1 per cent offers the highest yield spread in
developed Asia relative to Hong Kong, Australia and Japan. Organic growth is a big challenge (for S-
Reits), so overseas expansion is a key trend in the last three to four years,” he said.
“There’s still a group of investors out there chasing yields. Secondly, post-Brexit, there’s some money
flowing from European real estate investments into Asia due to concerns over what will happen in
Europe due to the uncertainties.”
