As Asia’s Malls Survive, Rethinking an “Urban Village” Approach to Retailing

E-commerce has finally arrived Singapore in a big way.  Amazon has appeared on the island’s shores, joining local etailers like Zalora and RedMart, and with meal delivery apps such as Deliveroo, FoodPanda, and UberEats, restaurant-grade food can come straight to your door. Nonetheless, the pipeline for brick-and-mortar retail remains strong, with a total of 509,000 square meters (5.5 million sq ft) of retail space of projects in the pipeline.

With excess capacity looming, the sector will need to adapt as competition increases. “Retail must undergo some very fundamental changes, and this is where we start seeing a need for us to go out and make retail very different,” says Wilson Tan, CEO of CapitaLand Retail, the retail arm of CapitaLand Group. It is no longer enough to be a convenient one-stop shop for a variety of products because online shopping already takes care of such needs, he says. What developers need to do now is to find the “X factor” to make both new and existing stock attractive to customers.

This X factor, according to the session’s panelists, is providing an experience rather than just a shop. And this might not be as “new” as one thinks: David Fassbender, executive director of portfolio management in Asia for PGIM Real Estate, argues that retail has “always been” about the experience.

That’s why, Fassbender says, malls in the United States are struggling more than those in Asia. Unlike their Asian counterparts, which often offer more options like dining and education resources, American malls have traditionally been designed simply to bring stores together, without further consideration of amenities and conveniences like transport links. “It’s just not interesting anymore,” he says.

Still, even tenants and landlords in Asia have gotten a little complacent. Terence Seah, head of the Singapore studio of Benoy, indicates a radical shift in mind-set with his practice’s decision not to use the word mall, preferring the term urban village instead. In his view, the shopping development of the future is going to be a porous experience. People no longer think of themselves as consumers, or of going to a particular place to shop. Developers are therefore increasingly focused on creating mixed-use spaces that allow for the creation of experiential activities.

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Kate McCartyglobal