Where have all the Manhattan tenants gone ?
I read therefore I write
This is an interesting article about increasing vacancies rate at 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 neighborhoods, and deep discounting from online retailers. In February, the heart of Madison’s shopping district had 37 vacancies or stores for rent …….. “
Situation looks similar to our high end shopping paradise – Orchard Road which is also fighting with others top shopping district in Asia Pacific like China, Korea and HKG , facing 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 district still a big question mark.
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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 performance of the retail shops around this area and have since trimmed down my exposure in Starhill Global REIT and totally disposed off the OUE-H Trust which have substantial revenue came from this area.
Starhill Global REIT still gave me a quite good returned of 14% ( XIRR ) as I have invested on it since 2009 while OUE-H Trust investment’s returned was barely 0.8 % after holding it for more than 3 years.
How about you ? Do you still have confident or belief in story of shopping paradise in these so called “ Luxury & High End Shopping Districts “ ?
Under such 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 vary from place to place.
“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