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How Singapore’s Malls Are Working Up A Sweat
By JLL Real Views
Monday, 28th January 2019
 

Singapore’s Orchard Road has been synonymous with shopping for decades, but lately shoppers are swapping sales for sweat sessions in gyms that are becoming an increasingly prevalent part of the landscape.

Fitness First, Virgin Active and Anytime Fitness are expanding rapidly across the island and taking up space in malls. Mega-gym PURE Fitness just took 28,000 square feet of space at Ngee Ann City last year, and another 11,000 square feet for a yoga studio at Suntec City Mall.

“Five years ago, the fitness and wellness trend was just evolving into a lifestyle,” says Siew Ling Lee, Senior Director – Retail for JLL in Singapore. “Now, more people are committing to an exercise routine but Singaporeans are always on the go, so fitness programs like the 45-minute HIIT or fitness and yoga studios that offer shower facilities and community-feel amenities tailored to the time-strapped working demographics and millennials are increasingly popular.”

That bodes well for Singapore’s mall owners that have large vacant space available for lease, especially at a time when they face a decrease in spend from tourists.

Around the world

It’s not just in Singapore. Worldwide malls are feeling the pressure from e-commerce and changing shopper behavior and are increasingly looking beyond their traditional tenants to fill vacant space. At the same time, interest in exercise and wellbeing is growing.

There are now more than 201,000 health clubs serving 174 million members globally, according to the IHRSA, fitness-industry body. And as malls battle declining footfall and spending, fitness tenants can give customers another reason to pay a visit.

“Need-based tenants, like gyms, create new reasons for repeat visits and longer stays at shopping malls, while providing added potential to capture sales,” says James Cook, Director of Retail Research, JLL.

In the U.S., mall owner Westfield has health clubs in more than half their properties, and GGP signed a partnership with Life Time mega-gym to transform their customer experience with new gyms.

“Properties that add a strong fitness tenant can attract a steady footfall with thousands of members funneling in and out their doors,” says Lee. “Most-likely those gym-goers are going to be potential customers to retailers outside of the gym – either a quick bite at a food and beverage outlet, purchasing active wear or wearable tech, or a last-minute gift. There are infinite opportunities to keep those shoppers in the space.”

Getting fit Singapore style

In Singapore, two are kinds of fitness facilities moving into malls – the large mega gyms that can anchor a space by taking up several thousand square feet of space and the smaller boutiques that take under 5,000 square feet of inline space and offer a niche classes.

Smaller fitness studios are also finding malls to be ideal locations. Pole dancing studio, Brass Barre took 3,000 square feet of space at Orchard Gateway, and OUE DownTown has added Absolute Cycle and Boulder Movement to their tenant mix. U.S.-based cult workout Barry’s Bootcamp is opening Singapore at 18 Robinson.

“Three years ago, landlords were generally less likely to consider a gym or fitness concept for prime units. Now, as rental gap is closing between retail and services trade for bigger format stores, health, wellness and activity-based tenants have become an increasingly attractive tenant for mall owners,” adds Lee.

Fitness facilities typically pay an office-type rent for their space within malls, with the mega-gyms paying in the low double digits per square foot versus the niche facilities rent is in the high single digits.

Plus they have one big factor working in their favor: fitness is a category that can’t easily shift en masse online anytime soon.

“Investors putting in a nominal investment in a vacant space to adapt it for a fitness tenant can create long-term interest and occupied space,” concluded Lee. “We expect in the next 10 years there will be consolidation in the sector, and large successful gyms to nab top performing niche players.”

This article was originally published on JLL Real Views, JLL’s news site exploring the big trends shaping the real estate industry’, with ‘Real Views’. www.jllrealviews.com. Reprinted with permission.

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