Where have all the Manhattan tenants gone ?
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| image credit to businesstimes.com.sg |
This is an
interesting article about increasing vacancies rate at the high-end shopping
district at Downtown Manhattan in today's The Business Time.
Quoted from
the article “ Dusty windows on Madison Avenue. Ghostly trace of sign-on
Columbus Avenue. Manhattan’s top retail strip, some of which are among the
world’s most expensive shopping districts, appear to have seen better days.
Once packed
street are being hit by completion from emerging neighbourhoods, and deep discounting
from online retailers. In February, the heart of Madison’s shopping district had 37 vacancies or stores for rent ……..
“
The situation looks similar to our high-end shopping paradise – Orchard Road which is
also fighting with other top shopping districts in the Asia Pacific like China,
Korea and HKG, facing a daunting challenge from filling up the right tenants and attracting enough shoppers to this district.
Although we
have seen increasing tourist arrival in recent quarters, but how much money
been spent in these high-end shopping districts still a big question mark.
My Experience with Orchard Shopping
District
Although I
am not a high-income earner that shop around and buying luxury items in the area of Orchard but I do
have some ( a very tiny) interest in the shopping malls in this street through
investment in REITs.
For me, I
would rather take a more pessimistic view about the performance of the retail shops
around this area and have since trimmed down my exposure in Starhill Global
REIT and totally disposed of the OUE-H Trust which has substantial revenue
came from this area.
Starhill Global REIT still gave me a quite good returned of
14% ( XIRR ) as I have invested in
it since 2009 while OUE-H Trust an investment returned was barely 0.8 %
after holding it for more than 3 years.
How about
you? Do you still have confidence or belief in the story of shopping paradise in
these so-called “ Luxury & High-End Shopping Districts “?
Under such a challenging situation, some shopping mall might be able to turn around the
situation by re-branding and changing the tenant mix, although the process will be painful and the success rate varies from place to place.
Cheers!
Quote Of The Day :
“Many investors today focus on
earnings, but I focus on assets and don’t try to predict next months’ earnings,
which is a much more difficult approach to investing.” By Walter Schloss
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