More consumers are going online to look for value buys but famous shopping strips like London's Bond Street, Tokyo's Ginza and New York's Fifth Avenue are not disappearing either.
The brick-and-mortar endorsement came yesterday from Mr Ho Sing, chief executive of YTL Starhill Global Reit Management, who told a forum the threat of e-commerce to Orchard Road is "overrated".
He was one of four Reit managers who gave their views on the challenges faced by the different real estate investment trust (Reit) sub-sectors in Singapore.
E-commerce is widely expected to have a disruptive impact on retail landlords, but Mr Ho is less concerned. He said: "When we try to mitigate this online shopping thing, actually we don't need to do much... It's the value shopper that goes online most of the time."
He noted that necessity spending will continue to prop up suburban malls, and people tend to buy higher-value items online only if they cannot be found in Singapore. In fact, online shopping has boosted retail overall, said Mr Ho, because it has educated the consumer.
Mr Koh Wee Lih, chief executive of Aims AMP Capital Industrial Reit, told the event hosted by Macquarie Securities: "Whether you buy from a retail outlet or online, the fulfilment is probably cleared out by a warehouse, so we benefit regardless."
Meanwhile, the rising popularity of Airbnb and other room-rental booking sites has put pressure on the hospitality sector.
But Mr Ronald Tay, chief executive of Ascott Residence Trust Management, feels the effect on his Reit is less immediate for now.
"Airbnb is a disruptor, we acknowledge that. But Ascott Reit is more focused on corporate travel vis-a-vis leisure travel," he said, noting that 85 per cent of the Reit's business in Asia comes from corporate travel, and corporates typically do not book rooms on Airbnb.
Airbnb and Ascott's serviced apartments are competing on different price points as well, he added.
Singapore is the third-biggest Reit market in the Asia-Pacific region after Japan and Australia, with S-Reits trading at an average yield of 6 per cent, offering the highest yield spread in developed Asia.
But the Singapore Reit, or S-Reit, sector has slowed down since the first Reit was listed in 2002.
"From 2002 to 2007, you probably saw about 7 per cent to 8 per cent growth in distribution per unit (DPU) and 4 per cent growth after the great financial crisis," said Mr Tuck Yin Soong, executive director of Macquarie Securities Singapore. Macquarie is forecasting DPU growth of about 0.2 per cent per annum in the next two years.
And competition is brewing - the Philippines, Indonesia and India are pushing towards establishing their own Reit regimes.
But Ms Ng Hsueh Ling, chief executive of Keppel Reit Management, pointed out that it takes time to build a Reit market.
"Good laws and regulations, no capital controls, no cash trap... these are things that make or break a Reit market," she said.
Separately, market talk has been that mergers and acquisitions could be a trend to watch in the S-Reits sector.
Mr Tay said: "I think consolidation is something that is going to be inevitable. A lot of institutional investors look at (trading) liquidity and size, and some (Reits) are not quite there. Consolidation is not necessarily a bad thing from an industry point of view."
