SINGAPORE (Nikkei Markets) -- Singapore's economy may have picked up pace but going by the results from the city-state's largest mall landlord, retailers continue to struggle as sales remain flat and rents, high.
CapitaLand Mall Trust, which owns or co-owns 15 retail properties in Singapore, said shopper traffic at its malls fell 2.4% year on year during the first six months, while tenants' sales per square foot slipped 0.2%.
However, rental income from several of its malls rose in the three months to June, lifting its gross revenue for the period by 1.6% to 171.4 million Singapore dollars ($125 million).
CMT, which is managed by a unit of CapitaLand, raised its distribution per unit for the quarter by 2.2% from the same period last year.
Looking ahead, the trust said it would continue to focus on sustaining DPU amid slowing economic growth.
Singapore retail sales, excluding automobiles, rose 1.8% last year, reversing three consecutive years of decline as the economy grew at its fastest pace since 2014.
However, momentum appears to be waning, with second quarter gross domestic product coming below analysts' forecasts.
According to the latest data, retail sales, excluding automobiles, rose 2.2% in May from a year ago after gaining 0.9% in April.
Property consultants CBRE said average retail rents in Singapore rose 0.2% from the previous quarter in the three months to June, the second straight quarter of increase after a long period of flat to falling rents.
Like in other countries, Singapore retailers have been hit by competition from online players that are able to offer a wider range of products at cheaper prices. Locals are also doing more of their shopping abroad, particularly in neighboring Malaysia where the cost of some goods and services is just half that in Singapore.
Leong Sze Hian, a 64-year-old writer and past president of the Society of Financial Service Professionals in Singapore, said he crosses the border once a month to take advantage of lower prices.
"Everything is cheaper in JB (Johor Bahru) and it's a quick S$1 bus ride for senior citizens from Singapore...My friends normally buy medicine, groceries, and we also enjoy the great cheap food, have a haircut and so on," he said.
Kurt Wee, president of the Association of Small and Medium Enterprises, said that while conditions in Singapore remain challenging, the retail sector is in a healthier position as compared to two or three years ago.
"The retail scene went through quiet consolidation. Some chains and brands have reduced their number of operating outlets," for cost reasons, he said. The ones that continue to thrive are concept stores or those that focus on the overall experience, he added.