Tuesday, March 23, 2010

Sports hub delays affecting some shops at nearby mall

DELAYS to the planned Kallang Sports Hub have left some stores in a nearby shopping mall languishing.

Operators of some of the smaller stores in Leisure Park Kallang, a six-storey, 200,000 sq ft mall with about 100 tenants, say the lack of walk-in traffic has left them struggling to make ends meet, even as anchor tenants like an ice-skating rink, bowling alley and movie theatre continue to pack crowds in.

At least six smaller stores have closed as a result, while several others are losing money or have trouble paying the rent. Two other stores say business is so bad they plan to drop the shutters soon.

However, Mr Han Chee Juan, the director of Jack Investments, the mall’s landlord, said there is little that can be done. He said the delays to the Sports Hub were unexpected, but added that ‘we just have to deal with it’.

‘When the Sports Hub is ready, then there will be a critical mass,’ said Mr Han, who pointed out that the mall is doing what it can to get traffic, like offering a shuttle service to and from nearby estates, offices and the Kallang MRT station.

He admitted that Leisure Park Kallang is a ‘low-lying mall with thin public transport’. However, he said the stores that failed had only themselves to blame: ‘In a ‘designated’ mall, tenants need to bring in products that will attract customers to the mall, they need to have their own pull.’

The real-estate veteran defined a ‘designated mall’ as one which does not rely so much on walk-ins, but depends on tenants to draw in the customers.

The tenants in trouble, said Mr Han, did not prepare themselves well enough, and offered poor products that did not attract shoppers.

But some tenants who spoke to The Straits Times – despite warnings from the landlord not to do so – blamed their woes partly on bad mall management. They acknowledged that the delays to the Sports Hub have hurt business, but accused Jack Investments of not doing its part to help draw customers. They added that the landlord has also been unwilling to discuss ways to improve the situation.

Eight tenants said that as a result, they have been losing as much as $10,000 a month over the last year. But quitting is not an option as they are bound by two- or three-year rental contracts.

Ms Philomena Cannon-Brookes, 39, the owner of JWT Kid’s Gym, said she has tried more than 20 times – and failed – to meet her landlord for talks. ‘It is really bad here,’ she said. ‘We are unable to sustain ourselves.’

Tethered to a three-year lease from 2008, she said the sports hub was one reason she set up shop there. But business was poor from the start, and her losses hit $5,000 a month almost as soon as she opened. That sum has ballooned to $10,000 a month now, and she has put in a request for a rental cut or to be let off the lease early.

There has been no reply from Jack Investments, she said.

Mr Eric Teow, the owner of Growing Paints, which conducts art classes for children, is another whose business is in trouble. The 49-year-old has not paid rent since last September and has been served with an eviction notice.

‘It is not that I don’t want to pay rent. I can’t,’ said Mr Teow, who has a three-year lease and pays $5,000 a month. ‘The Sports Hub didn’t happen, so the management has to do its part. They can’t just keep collecting the same amount of rent.’

The situation faced by the smaller stores stands in contrast to that of bigger outlets, such as the Cold Storage supermarket, which are packed, especially on weekends. When The Straits Times visited the mall on Sunday, the upper floors, which housed the ice-skating rink, food court, cinema and bowling alley, were teeming with people. The smaller shops, however, stood empty.

Analysts said one reason some outlets are doing well is that they are unique: The rink, for example, is the only one in Singapore. The supermarket also serves a relatively well-off neighbourhood, the Tanjong Rhu condominium cluster, about a 10-minute walk away.

Leisure Park Kallang re-opened in 2007 after a $70 million facelift. The 35ha Kallang Sports Hub was to have been completed this year, but financial concerns like high construction costs led the project to be pushed back several times. It is now slated to be completed by 2013.

In response to queries, Jack Investment said it would meet tenants to discuss the difficulties they face and see how it can help. Mr Han added that a boost for business is just over the horizon: The Stadium MRT Station, which will open on April 17, will lift mall traffic by 10 to 25 per cent, he reckons.

Source: Straits Times, 23 Mar 2010

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