They will need to adjust to age groups' needs.
Retail space needs to be transformed to stay relevant in the Internet age, JLL said.
Citing data from the Urban Redevelopment Authority (URA), JLL said e-commerce could have contributed to a substantial portion of the overall 5.3 million sqft of vacant retail space in Singapore as of Q3.
The government also wants to grow the e-commerce share of retail receipts from about 3% in 2016 to 10% by 2020, potentially. As a result, the proportion of existing physical retail space that may no longer be required for retailing could increase further.
The growth of online shopping led to rising vacancy rates and lower retail rents in the past few years, JLL said.
The vacancy rate of island-wide retail space has gradually risen from 4.5% in 4Q13 to 8.1% in Q2.
Rents of retail space in the Central Region have correspondingly fallen 15.6% over the 11 quarters ending Q3 from the recent peak in Q4 in 2014.
On the upside, physical retail stores still have a key role in the Singapore retail scene.
JLL Singapore consulting director of research and consultancy Angelia Phua said, “The Generation X and Baby Boomers still prefer to shop in physical stores while the Millennial Generation and Generation Y enjoy visiting malls to browse and linger in cafes to socialise and engage in online activity on mobile equipment. To stay relevant, landlords and retailers will need to innovate and adopt new strategies to navigate the challenging retail environment.”
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