DESPITE booming sales, some retailers at popular electronics mall Sim Lim Square are facing a crunch - recent hikes in shop space rents have brought prices close to those in Orchard Road.
A regular haunt for computer buffs, the mall in Rochor Canal Road has over 300 shops selling everything, from computer parts to printer cartridges and MP3 players.
Prime locations on the first, fourth and fifth storeys, for example, can now cost as much as $40 per square foot to rent, said retailers - a price comparable to rents in a place such as Lucky Plaza in Orchard Road.
This, they pointed out, is almost double the rental cost of about 1 1/2 years ago.
Other less popular areas, like the building's 'outer ring', are said to cost between $8 and $15 a square foot.
Rentals rise and fall often at Sim Lim Square because the ownership of stores can change hands quickly. The complex has over 300 owners, many of whom are open to new bidders keen for a slice of the action.
This is unlike buildings owned and run by a single property developer, which tends to keep rentals more stable.
One Sim Lim Square shop which has had to halve its size is popular game retailer Tec-Drome on the fifth storey. It has been there for 14 years.
Mr Woo Liah Meng, who runs the shop, said Sim Lim Square is still a huge draw for customers looking for anything from computer games to gizmos like joysticks.
'But the overheads are going up and I need to keep my costs down to compete,' he said.
He said he has received offers to relocate to Suntec City but prefers to stay at Sim Lim Square, where his loyal customers can find him.
Some of his rivals have bowed out of Sim Lim altogether.
Earlier this year, popular game shop Green Domain left its prime spot facing the elevators on the fifth floor for a smaller outlet at the back of the mall. It later moved out.
Mr Peter Ong, who helped run the store, told The Straits Times earlier this year that the rentals had doubled and many retailers were finding it hard to stay competitive.
Popular stores in Sim Lim have been known to pull in sales of between $1 million and $2 million a month, but products are often said to be sold at very thin margins of a few per cent.
Mr Lee Ong Chun, chairman of the building's management committee, said retailers usually bank on volume.
'Sometimes, they only earn a few dollars from a $100 printer,' he noted.
Despite the intense competition, there are always eager takers for space at Sim Lim Square, where shops often turn over within a few years.
One of them, Gamers Hub, recently moved from its basement one location to the fifth floor to sell Xbox and PC games.
This is costing the owners about $20 per square foot - 2 1/2 times what they used to pay.
Ms Tan Mie Kee, one of the partners of the store, is happy with the move, saying: 'We are seeing better sales already and can justify the rental. But if you are thinking of making a very big profit, it is still a bit difficult.'
siewtha@sph.com.sg
BATTLE TO SURVIVE
'...the overheads are going up and I need to keep my costs down to compete.'
MR WOO LIAH MENG of Tec-Drome
