Skip Ribbon Commands
Skip to main content

News Release


E-commerce is transforming the use of retail space for retailing purpose

Landlords and retailers need to innovate and adopt new strategies to stay relevant and navigate the challenging retail environment

​SINGAPORE, 7 December 2017 – With technological advancements such as the pervasive smartphone use and digital commerce rapidly reshaping the Singapore retail scene, online shopping will continue to grow, and retail competition will intensify. Retail space will have to be transformed to stay relevant for retailing purposes in this Internet age.

The first of a series of research papers published by JLL today found that e-commerce could have contributed to a substantial portion of the overall 5.3 million sq ft of vacant retail space in Singapore, reported by the Urban Redevelopment Authority (URA) as of 3Q17. With the government looking to grow the e-commerce share of retail receipts from about 3 per cent in 2016 to 10 per cent by 2020, potentially, the proportion of existing physical retail space that may no longer be required for retailing could increase further.

In fact, the growth of online shopping, coupled with a cyclical headwind, has led to rising vacancy rates and falling rents of retail space over the past few years. According to the URA, the vacancy rate of island-wide retail space has gradually risen from 4.5 per cent in 4Q13 to 8.1 per cent in 2Q17. Rents of retail space in the Central Region have correspondingly fallen 15.6 per cent over the 11 quarters ending 3Q17 from the recent peak in 4Q14.

Ms. Lee Siew Ling, National Director of Retail Leasing, explains: “Limiting the release of government land sales sites for retail will slow down future supply and contain rising vacancy rates. While consumer sentiment has picked up alongside the improving economic conditions, retailer sentiment remains cautious in the face of intensifying competition from online retailers, and this will continue to put pressure on rents.”

Notwithstanding the impact of e-commerce on the retail trade, physical retail stores still have a key role in the Singapore retail scene.  

Ms. Angelia Phua, Consulting Director of Research and Consultancy for JLL Singapore and the author of the report, elaborates: “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.”

For more details, download the paper Technological advancements transforming the Singapore retail scene here.