KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
Sluggish Tourism Recovery Weighs on Downtown Malls
According to S&P Global Ratings’ latest annual report on Southeast Asia’s major property players, Singapore’s retail sector is set to face slower growth momentum in the coming quarters. The drag comes primarily from a weaker-than-expected tourism recovery, dampened by global macroeconomic uncertainties and the strength of the Singapore dollar.
While Singapore’s active event and business calendar should lend some support to inbound travel, muted tourist spending is expected to weigh disproportionately on the performance of downtown malls, where foreign visitors typically account for a significant portion of retail sales.
Suburban Malls Show Defensive Strength
In contrast, suburban malls continue to demonstrate resilience. Their heavy reliance on domestic demand and recurring footfall from nearby residential populations provides a stable earnings base. This defensive positioning makes them less vulnerable to external shocks, such as currency fluctuations or slower inbound tourism flows.
However, challenges persist. Elevated operating costs—including utilities, manpower, and rental expenses—combined with soft consumer sentiment, remain headwinds for retailers. The sector must also contend with shifting consumer preferences toward e-commerce and value-driven purchases.
Investment Implications
Retail REITs with Downtown Exposure: Portfolios heavily concentrated in central business district (CBD) or tourist-driven malls could see earnings pressure in the near term. Valuations may face downside risk if footfall and tenant sales remain muted.
Suburban Retail REITs: Names with suburban exposure should offer relative stability. Consistent demand from local catchments makes them attractive defensive plays in uncertain conditions.
Rental Growth Outlook: Limited upside in rental reversions is expected for downtown malls, while suburban assets may still achieve modest positive reversions supported by stable occupancy.
Structural Shifts: Long-term growth will depend on how operators manage tenant mix, integrate omnichannel strategies, and enhance experiential retail to attract both local and tourist shoppers.
Bottom Line
The Singapore retail sector presents a mixed outlook. Downtown malls remain pressured by sluggish tourism recovery and currency headwinds, while suburban malls stand out as resilient anchors supported by local consumption. For investors, suburban retail REITs may provide more defensive positioning, while exposure to downtown malls requires a cautious approach given earnings headwinds and macro uncertainty.
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