Will the new Sing­post Cen­tre re­vive its weak­en­ing mail busi­ness?

Singapore Business Review - - CONTENTS -

Walk­ing through the newly re­opened Sing­post Cen­tre, which took two years and $150m to ren­o­vate, mall cus­tomers find that they quickly turn into dig­i­tal ex­plor­ers. They can scan items whilst shop­ping and pay con­ve­niently in one go at the counter, use a mo­bile app to track down in which aisle a prod­uct is lo­cated, and even try out cut­ting-edge aug­mented and vir­tual re­al­ity ap­pli­ca­tions. The mall’s tech­nol­ogy trans­for­ma­tion is part of Sin­ga­pore Post’s drive to be­come a mod­ern e-com­merce lo­gis­tics pow­er­house and break free from the profit drag of its weak­en­ing mail busi­ness.

John Cheong, an­a­lyst at May­bank Kim Eng, noted that the swanky new Sing­post Cen­tre de­liv­ers a tech­nol­ogy-en­abled ex­pe­ri­ence and a ro­bust oc­cu­pancy rate on open­ing day, even as the mall’s gross re­tail floor space dou­bled to 269,000 sq ft and net let­table area to 178,000 sq ft.

“It has achieved a healthy oc­cu­pancy rate of 80.4%, helped by its con­ve­nient lo­ca­tion, next to Paya Le­bar MRT in­ter­change sta­tion,” said Cheong. “The mall also high­lights Sing­post’s em­brace­ment of how tech­nol­ogy is chang­ing the re­tail land­scape.”

He ex­pects an ad­di­tional rental in­come of $22m, which trans­lates to $13m earn­ings at a steady state of 90% oc­cu­pancy. For FY18E, he said Sing­post Cen­tre should con­trib­ute $3m of earn­ings (3% of to­tal), and $13m of earn­ings (10% of to­tal) for FY19E. He added that for in­vestors, Sing­post’s key value propo­si­tions in­clude its move to branch out from a na­tional postal provider into global e-com­merce and ful­fil­ment lo­gis­tics that helps re­tail cus­tomers sell on­line faster and more ef­fi­ciently.

Low Pei Han, an­a­lyst at OCBC, said the new Sing­post Cen­tre re­tail mall show­cases a new form of dig­i­tal shop­ping ex­pe­ri­ence that shop­pers will be keen to try out. “Ten­ants of the mall, in­clud­ing Sing­post’s flag­ship Gen­eral Post Of­fice, have rolled out new dig­i­tal in­no­va­tions to of­fer greater con­ve­nience, choices, and ex­pe­ri­ences to con­sumers,” said Low. “Look­ing ahead, on­line e-mer­chants and of­fline brick-and­mor­tar shops will also be un­der one roof.”

Sachin Mit­tal, an­a­lyst at DBS, reck­oned that in the new mall, the Gen­eral Post Of­fice fea­tures au­to­mated ser­vices that im­prove op­er­a­tional ef­fi­ciency and pro­vides 24/7 ac­cess to postal and other essen­tial ser­vices.

Mall go­ers even have the op­tion to ac­cess Sing­post’s largest Pop­sta­tion of 143 lock­ers, and SAM kiosks aug­mented with a self­ser­vice post­ing box for reg­is­tered ar­ti­cles. He es­ti­mated Sing­post’s full rental in­come dis­tri­bu­tion will come in FY19, with an es­ti­mated $17m rental in­come in FY19F, or tripling from $6m in FY18F.

Sing­post Cen­tre should con­trib­ute $3m of earn­ings (3% of to­tal), and $13m of earn­ings (10% of to­tal) for FY19E.

Sing­post’s flag­ship Gen­eral Post Of­fice have rolled out new dig­i­tal in­no­va­tions

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