In a nod to the National Stadium, the Sports Hub mall, which starts opening for business from the second half of next month, was yesterday named Kallang Wave.
More than 80 per cent of the 41,000 sq m retail space at the mall, operated by a joint venture between SMRT Corp, which holds 70 per cent, and supermarket chain FairPrice, has already been snapped up.
The mall will have a FairPrice Xtra which will be Singapore's first "sports-themed" hypermarket, offering "a good selection" of sporting equipment along with household items, said Mr Tan Kian Chew, group chief executive of FairPrice.
Other anchor tenants include H&M and Uniqlo, with Brewerkz, Poulet and Shokudo among the food and beverage outlets.
The mall could pave the way for dramatic growth of SMRT's non-fare revenue. The complex's retail space is larger than the 36,000 sq m the transport operator has in its entire rail network.
The group's rental income was $73.4 million for the year ended March 31 - or 87 per cent of its total operating profit. Assuming a similar business model, the new mall could boost SMRT's rental revenue by 80 per cent once all the space is taken up.
But observers say there will be material differences. For one thing, net lettable space will be less than 41,000 sq m, and rents could be lower than what SMRT charges in its stations. Rental yield is also likely to be weaker.
DBS Vickers analyst Andy Sim said: "The fee SMRT pays the Land Transport Authority for the station space is next to nothing; its rental margin is over 70 per cent. But for the Sports Hub retail mall, SMRT is a master lessor and its margin will be nowhere near what it gets from rental at its stations."
Mr Sim added that, in absolute terms, rental rates may also be lower than the $20 to $21 per sq ft per month that SMRT gets for station rental.
He noted that the Sports Hub was not yet a proven destination. "The concept is nice but, ultimately, they'd have to price it attractively to draw tenants," he said.
SMRT's managing director of commercial business Dawn Low said at a preview of the venue yesterday that Kallang Wave will be "accretive" to revenue, and that its rental rates are "competitive".
Investors, meanwhile, are warming up to SMRT again after steering clear of it for the past two years or so.
Three weeks ago, its share price surged 20 per cent to a four-month high of $1.22. The stock closed up one cent to $1.27 yesterday.
Analyst Andy Wong of OCBC Investment Research said in a May 5 report that "the worst may be over for SMRT", and that he had bumped up its fair value from $1.06 to $1.25.