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August 2, 2026

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With department stores shutting, are anchor tenants a thing of the past for malls?

Metro, which is an anchor tenant at Paragon and Causeway Point, announced last month that it would close its last two stores.

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SINGAPORE: In the early days of Singapore’s shopping malls, department stores were often synonymous with the malls they anchored.

Say The Centrepoint, and one might think of Robinsons. Or Ngee Ann City, and Takashimaya would come to mind.

But with Metro set to leave Paragon and Causeway Point when its lease expires, retail experts said such anchor tenants are no longer the defining draw they once were.

Instead of relying on a single anchor tenant to pull crowds, mall operators are increasingly turning to a mix of food and beverage (F&B) concepts, lifestyle brands and entertainment tenants to keep shoppers coming.

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The role of anchor tenants has evolved alongside shifts in consumer preferences, said Mr Ervin Yeo, CEO of commercial management at CapitaLand Investment.

A mall’s success rests on the strength of its overall tenant mix rather than any single tenant, he added.

“Singapore shoppers today are more well-travelled and discerning, and are looking for more curated, differentiated and experience-led offerings. Mall operators have also developed the capabilities to curate trade mixes more strategically.”

As a result, anchor tenants these days help shape the identity of the mall, rather than act as the primary attraction, he said.

ANCHOR TENANTS OF THE PAST

Anchor tenants, as their name implies, traditionally hold a mall together, said Dr Chua Yang Liang, head of research and consultancy at JLL Southeast Asia.

Department stores, for instance, helped drive foot traffic and a mall’s branding.

For example, the Japanese department store Yaohan was a key anchor tenant for malls such as Plaza Singapura and Thomson Plaza from the 1970s to the 1990s.

When the first Yaohan opened in Plaza Singapura in 1974, it was Singapore’s biggest supermarket-cum-department store. (File photo: Mediacorp)

As Singapore’s retail landscape became more competitive and consumers more affluent, department stores gradually lost their role as one-stop shopping destinations.

“These very same brands that were previously carried in the department stores are now selling directly through either the physical brick-and-mortar space or through e-commerce,” said Dr Chua.

“So the relevance of departmental stores today has been somewhat diluted,” he said, although he noted that they are still prevalent in some markets in Singapore.

Metro said on Jul 20 that the planned closures of its department stores followed a “strategic review” of its retail operations as it seeks to better align with evolving consumer preferences, shopping habits and market trends. The date of its last day was not announced.

Its planned exit is the latest in a string of notable department store closures. Isetan shuttered its Nex outlet earlier this year after closing its Tampines Mall store in 2025, while BHG exited Junction 8.

The decline of department stores reflects a broader shift in what malls consider an anchor tenant.

“Today, the anchor concept has also morphed. In the past, it used to be much bigger, but correspondingly, today you find that there are many anchors around. So there are smaller-sized developments, but multiple of them within the same mall,” said Dr Chua.

Commercial considerations have also reshaped the role of large-format tenants.

Nanyang Technological University’s (NTU) Adjunct Associate Professor Lynda Wee said a downside of large anchor tenants is that they typically pay lower rent per square foot due to the space they occupy.

But with many major malls backed by real estate investment trusts (REITs), investors expect operators to maximise returns, she said.

Instead of relying on the anchor tenant to attract shoppers, mall operators take on that job now.

Mall operators have loyalty cards to track data points and know what offerings to curate, while retail brands are more sensitive to marketing and can attract customers on their own.

“The role of anchor tenant is to attract people to come back to the mall, and the way to attract people to come back to the mall is that if you understand what they care about and why they will return,” said Dr Wee.

She added: “You no longer need an anchor tenant to do that. You can do it yourself.”

Singapore Cabinet 2026

ROLE OF OPERATORS

In this landscape, experts said it is on mall operators to play a strategic role in capturing footfall.

Ms Jenny Khoo, head of retail and workspace management at Lendlease, said the success of a mall is increasingly driven by a “thoughtfully curated and complementary” tenant mix that responds to the needs of the local community and its demographic.

The type of anchor tenant also matters.

For example, supermarkets provide convenience and support frequent visits. Entertainment, lifestyle, wellness and fitness offerings can drive longer dwell times and repeat patronage, Ms Khoo said.

Department stores with differentiated and curated offerings may offer shopping experiences that are still much appreciated by consumers in certain precincts, she added.

“The right mix ultimately depends on the asset, its catchment and the evolving preferences of its shoppers,” she said.

A spokesperson from Frasers Centrepoint Trust said that active placemaking and the ability to create engaging, diverse shopper experiences increasingly drive a mall’s success.

“This is consistent with our broader asset management strategy, where we continuously review mall layouts, trade mix and space utilisation. In curating a mall’s tenant mix, its anchor tenants are carefully thought through as well,” the spokesperson said.

The interior of Metro Causeway Point on Jul 21, 2026. (Photo: CNA/Charmaine Jacob)

The role of a mall operator is particularly important when a long-standing anchor tenant leaves, creating a large and visible vacancy.

There is reputational risk if mall operators take too long to backfill it, said JLL’s Dr Chua, adding that it could appear that the asset is not doing well.

“Nonetheless, it all presents an opportunity to the operator for it to reposition the asset or cut up the space into smaller units, bite-sized units that could command a stronger rent, but also implies more churn and high operational costs,” he said.

At Paragon, feasibility studies are underway to optimise and selectively reconfigure certain areas, including the space currently occupied by Metro, said CapitaLand’s Mr Yeo.

CapitaLand Integrated Commercial Trust recently acquired the mall in a S$3.9 billion deal.

He added that Metro has expressed interest in remaining at Paragon under new retail concept stores, and discussions are ongoing.

When evaluating any large-format space, their planning begins with the intended positioning in the mall and its relevance to its catchment, said Mr Yeo.

“Depending on the fit, this could involve introducing another sizeable anchor, right-sizing an existing anchor, or subdividing the space into a curated mix of smaller concepts that collectively deliver destination appeal,” he said.

At Junction 8, the former BHG space is now home to brands including Uniqlo and Japanese home and living brand Nitori, alongside a mix of beauty and wellness stores.

At Tampines Mall, rejuvenation plans were well underway ahead of Isetan’s closure, Mr Yeo said. A S$24 million asset enhancement initiative, scheduled for completion in the fourth quarter of this year, will refresh the mall’s environment, he added.

The spokesperson from Frasers said Metro’s announcement to exit Causeway Point aligns with the operator’s planned asset enhancement initiatives next year.

They are in discussions with Metro on future arrangements, including opportunities to introduce “new and exciting” retail concepts.

“We are also exploring the subdivision of the existing anchor space, which will enable us to refresh the mall’s offerings and expand retail choices for shoppers across F&B, lifestyle and entertainment categories,” the spokesperson added.

At Nex, footfall has remained strong following Isetan’s exit in April, the spokesperson added.

“The first phase will involve the multi-floor reconfiguration of the space occupied formerly by Isetan to cater to newer and more refreshing store concepts.”

The Isetan store at Nex in Serangoon will close in April 2026. (Photo: CNA/Koh Wan Ting)

THE NEW ANCHORS

If department stores are no longer the default anchor tenants, how can a mall stand out?

Experts say the answer is not necessarily replacing it with another large retailer, but having offerings that give shoppers a reason to visit and return.

Ion Orchard, for example, does not rely on a traditional department store. Instead, it has multiple duplex boutiques on the first floor that, together, draw shoppers. The food court at the basement, and Ion Art on the fourth floor, also add to the unique proposition of the mall.

“So instead of one big anchor tenant, we now go for secondary, or we call it a flagship store concept,” said Dr Wee.

With physical retail declining due to the rise of e-commerce, the new type of anchor tenants will focus on experiential and lifestyle-led concepts, experts agreed.

Some examples are sports and wellness destinations, entertainment and cultural spaces, as well as immersive flagship experiences, said CapitaLand’s Mr Yeo.

For instance, the rock-climbing walls at Kallang Wave Mall and Funan, and Yamaha and Spotlight at Plaza Singapura are different types of anchors that contribute to the mall’s distinct identity, he said.

Dr Chua pointed to the rise of premium supermarkets integrated with dining concepts, or indoor playgrounds and yoga or pilates studios as examples of emerging anchor tenants.

The evolution of anchor tenants also reflects a broader shift in the role of shopping malls.

He noted the trend of libraries being integrated into shopping malls.

“The libraries are now performing that function within the mall, which makes the mall become more like a town centre. It holds a social element to it,” he said.

Dr Wee said the answer to the question on how malls can generate foot traffic regularly could be brands that cater to lifestyle needs.

“What will bring me to a mall is no longer just shopping. It’s no longer just eating,” she said. “I think instead of anchor tenants and all that, the shopping mall today will change to become lifestyle centres.”