EFFECTS OF RETAIL INTENSIFICATION IN REIT-OWNED MALLS

Abstract

There has been increasing competition in the retail market these recent years, especially with the introduction of Real Estate Investment Trusts (REITs). As these investment vehicle pays out regular dividends to their unitholders from the rental collected, mall managers are highly motivated to enhance their properties for better rental yield. This may be done through (1) “decanting”; (2) conversion of carpark spaces for retail uses; (3) reconfiguration of floor area; (4) cart retailing and (5) introducing more specialty stores. In view of the above phenomenon, this research attempts to investigate shoppers' perception on retail intensification in REIT-owned malls and their level of shopping satisfaction after the changes. Bugis Junction, Raffles City Shopping Center and Suntec City Mall have been selected as the study areas for this research. The research found that shoppers acknowledged the intensification in terms of wider range of tenant mix and enhanced shopping experience, and were satisfied with these changes. However, they also identified that in terms of spatial factors, such as layout, spaciousness of aisles and navigation within the mall, intensification was not significant. Even so, minimal satisfaction level was affected and thus, it was concluded that retail intensification generally leads to shoppers' satisfaction and the diversity of goods ruled over the comfort of shopping.