SINGAPORE — With consumer spending shifting rapidly to e-commerce platforms, the operator of Tiong Bahru Plaza and Liang Court near Clarke Quay has made the revamping of malls — not just in looks, but also in tenant mix — a priority in its attempt to counter weakening prospects for bricks-and-mortar retail outlets.

This agenda of AsiaMalls Management, which started at the end of 2013 with a S$40 million revamp of White Sands in Pasir Ris, was further entrenched when Mr Tan Kee Yong joined the firm as managing director in September 2015, bringing with him 30 years of retail management and real estate experience.

“I would say that AsiaMalls has not been quite (so) active in the past in terms of (the) refurbishing of malls, that’s something we acknowledged ... compared to our competitors who do enhancements more frequently. They may be small in nature, but there are constant enhancements being put in by our competitors,” Mr Tan told TODAY in an interview.

His previous stints include roles at CapitaLand Mall Asia, Far East Organization and Suntec City Management, and he admitted that asset enhancement initiatives are “practised quite religiously” at these organisations. He hopes to instil this mindset into the DNA of AsiaMalls.

Besides White Sands, whose renovations will be fully completed this month, AsiaMalls also embarked on an extensive S$90 million makeover of Tiong Bahru Plaza in 2014 and is conducting feasibility studies for Century Square in Tampines.

“The reason we’re doing this is because we want to get the malls up to speed and reinvent the malls to cope with the challenging retail landscape. If we do not get the malls up to speed and get them transformed, then I think it’s going to be very difficult for us to compete in today’s challenging market,” said Mr Tan.

He added that the company does not set a budget for this venture, but is “prepared to invest” if mall revamps could generate better returns for the firm.

Revamp of Physical aspects and the Trade Mix

“It’s a makeover not just in terms of the physical facet but also in terms of the trade mix,” he said, explaining that for both White Sands and Tiong Bahru Plaza, his team set a target of having 30 per cent new-to-mall tenants.

The decision on the types of tenants and facilities to inject into the revamped malls also incorporated suggestions from neighbouring residents, among whom the AsiaMalls team sought feedback through focus group discussions.

New features at the revamped malls include a cluster of enrichment programme operators such as MindChamps, Adam Khoo Learning Centre and I Can Read. The malls also boast a higher percentage of food and beverage (F&B) outlets — tenants who are “not easily replaced by e-commerce”, according to Mr Tan.

Such a strategy is hardly surprising, as studies have found that mall operators are allocating less space to retailers to make room for restaurants and cafes, as well as entertainment and services-oriented businesses that are more resilient in the current challenging climate.

Real estate consultancy CBRE, for instance, said in a recent report that the proportion of F&B businesses in Singapore retail malls has risen to an average of between 25 and 30 per cent from the 15 to 20 per cent of some five to 10 years ago.

The report follows the latest retail sales index published by the Department of Statistics Singapore, which showed a 3.2 per cent drop in retail sales in February compared with the same month a year ago.

But the undertaking has borne some fruit for AsiaMalls, with traffic to White Sands in December 2015 increasing by 12 per cent compared with the same month in 2013 before the mall started its renovations. Work on Tiong Bahru Plaza is expected to be completed later this year.

“The last thing we want to see is shoppers not finding the mall relevant and (not seeing) a need to visit the malls because they don’t find the brands and tenants something they look forward to, or they think that they can buy that stuff online or go to a competitor’s mall. I think that would be disastrous,” said Mr Tan.