Will the new Singpost Centre revive its weakening mail business?
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