ncreased slightly during the last year. Unfortunately, the value of its interests in projects in Germany and Australia (in the latter country it owns Greenwood Plaza mall and its associated office tower in North Sydney) fell sharply. In Singapore, company gross revenue rose by 8.2 per cent, year on year, to S$1.56 billion, while net property income grew by 7.0 per cent, to S$1.12 billion. Revenue growth slowed in the second half, to 4.1 per cent. The better performance in 2023 was largely attributed to a robust contribution from Raffles City, which has been renovated and expanded to house 50 more shops, along with the full-year contributions of some acquisitions made in 2022. These pluses were offset by the effect of higher interest rates on the company’s financing costs, which ballooned by one-third, to S$322.1 million. Bottom line: net income for the year was S$765.77 million, an increase of 6.3 per cent. Specifically for the company’s retail assets, full-year gross revenue reached S$570.5 million, an increase of 2.5 per cent, while net property income was S$396.3 million, up 0.6 per cent. For the ‘integrated developments’ (read mixed-use, including iconic projects like Raffles City and Plaza Singapura), gross revenue rose by 10.9 per cent, to S$467.5 million and net property income went up by 8.6 per cent, to S$328.6 million. Healthy operations On the operations side, the company pointed to a number of achievements and advantages that it says were noteworthy. First was the higher occupancy of 98.5 per cent in both the retail and mixed-use portfolios. New leases enjoyed positive rent spreads, or what CapitaLand refers to as ‘rent reversions’, meaning the per cent difference between average rents on expiring leases and average rents on new leases). Last year, the spreads were a healthy 8.5 per cent. Second, the company pointed to an improvement in tenant sales per square metre (+1.8 per cent) and shopper traffic, which was up a healthy 8.6 per cent. Growth in both metrics was stronger downtown than in the suburbs, which is to be expected because of the normalisation of tourism that occurred apace throughout the year. The number of international visitors reached 13.6 million last year and the Singapore Tourism Board expects as many as 16 million to visit the island state in 2024. For perspective, the total number of visitors in 2022 was 6.3 million. Third, CapitaLand points to proactive management of the lease expiry schedule so that expirations are well spread out over time: 12 per cent of retail leases will expire this year, and 15 per cent in each of the following two years. Spreading out the expirations makes the portfolio more stable and income more predictable. It reduces the risk of holding a large number of negotiations in a concentrated period when market conditions may not be favourable. Last year, the company boasted a retail tenant retention rate of nearly 83 per cent. Fourth, the portfolio has a highly diversified mix of tenant categories that largely reflect consumer demand. The top three retail categories by rental income are food and beverage (accounting for 18 per cent of rental income), health and beauty (7.5 per cent) and fashion (a slightly more modest 5.0 per cent). Coincidentally, these three categories also topped the list of ‘enquiries’ handled by CapitaLand’s leasing team in the last quarter.  No spectacular gains In terms of the productivity of tenant space, measured by sales per square metre, the results are solid without being eye-catching. The leading growth categories in the portfolio were shoes and bags (+6.4 per cent), services (for example optical, travel, locksmiths, +5.7 per cent), food and beverage (+4.1 per cent), and infotech and telecommunications (+3.8 per cent). At the other end of the continuum were home furnishings (-8.6 per cent), and jewellery and watches (-7.1 per cent). The work never ends While the leasing team continues to bring fresh talent into its mainstream malls and mixed-use properties, CapitaLand isn’t forgetting about a project that, for Singapore, is unusual: IMM (International Merchandising Mart) mall, the company’s factory outlet centre in the Jurong East neighbourhood. While factory outlet centres have long established themselves as part of the retail pantheon in other parts of Asia, including Japan, Malaysia, Korea and Thailand, they are a rarity in Singapore. Now, CapitaLand plans to spend S$48 million to expand the centre from 90 to 110 stores and spruce up the building in four phases, to be completed in the third quarter of 2025. But there is no time to stop and rest on laurels at the mainstream centres. The company wants to continue making its centres the first-choice platform for new entrants into the Singapore market, which in the fourth quarter included the first foreign outpost for Indonesian coffee chain Fore Coffee, and three brands from China: Bingz (crispy burgers), Eichitoo (women’s wear) and balabala (kids’ clothing). All this is taking place against a backdrop of mediocre growth for the local economy as a whole, which grew by only 1.1 per cent last year, according to revised government estimates released in mid-February. The forecast for this year is not much better, at somewhere between 1-3 per cent.  Island-wide, retail sales are not going so well either: excluding motor vehicles, they fell by almost 3 per cent in December, year on year. It seems that Singaporeans were doing a lot of celebrating and not much shopping, because food and alcohol was one of the very few categories that enjoyed an increase. On the positive side for a mall operator, online sales penetration continues to be stuck below 15 per cent, a level on which it has settled post-Covid and shows no sign of budging from. For Singapore’s malls, and its retail sector generally, this is unlikely to be a banner year but, fingers crossed, it shouldn’t be anything like a disaster either.