Orchard Road, Singapore's highest rent
retail district attracts more than
seven million foreign visitors each year and recently the property powerhouses of Singapore and Hong Kong collaborated on a major
expansion with Ion.
Rents for ground floor shops in
Orchard Rd hold up
The heat is on for Orchard Road retail
rents with declining retail sales and substantial new supply completing
soon, but Cushman and Wakefield says opportunistic retailers entering the
final stages of negotiations for limited remaining choice ground-floor spots
in new malls have kept demand for prime retail space firm in the first six
weeks of this quarter.
The average monthly rental value for
prime street-level retail space on Orchard Road dipped 1.1 per cent in the
six weeks between end-Q1 2009 and mid-Q2 2009, lower than the 4.6 per cent
quarter-on-quarter contraction seen in Q1 2009.
'Demand for retail space fell into a
state of paralysis in Q4 2008 and early 2009 as the global economy was
clouded under the tint of uncertainty. However, retailers have now moved
into a state of acceptance and we are seeing more leases under negotiation,'
says Cushman's associate director of retail consulting and leasing Turner
Canning.
Cushman's average monthly rental value
for prime ground floor Orchard Road retail space stood at $36.50 per square
foot (psf) as at May 15, down 1.1 per cent from $36.90 psf as at end-March
2009. The latest mid-Q2 2009 figure represents a fall of 5.7 per cent since
end-2008.
'While there is short-term resilience in
prime retail rents, our forecast calls for a decline of a further 5-10 per
cent in Orchard prime ground floor retail rentals through to the end of the
year because of the generally weak retail outlook,' said Cushman's director
of research Ang Choon Beng.
According to Knight Frank figures, ION
Orchard, Orchard Central, 313@Somerset and Mandarin Gallery are among the
new malls that will add a total 1.8 million square feet of net retail space
in Singapore's prime Orchard Road shopping belt from now till mid-2010, a
whopping 40 per cent increase from the current stock of 4.5 million sq ft.
Knight Frank managing director Danny Yeo,
a veteran in the retail property consultancy sector, noted that despite the
pressure from all the new shop space on Orchard Road, rents for ground floor
space will probably hold up better than on the upper floors as the number of
street-level units facing Orchard Road are limited in supply, whereas the
supply on upper floors will be more substantial. 'So the rental drop on
upper floors will be more severe than for ground floor space,' he added.
Cushman's Mr Canning reckons that upper
floor shop space for new and existing malls on Orchard Road could today be
fetching monthly rents of about $20-25 psf, lower than around $25-35 psf a
year ago.
Knight Frank's Mr Yeo says it is
difficult to quantify decreases in retail rents as traditionally measured on
a fixed monthly psf basis. 'Increasingly, we're seeing more leases on a mix
comprising slightly lower fixed rentals but also including a percentage of
sales. This model cushions tenants when business is not on a level they want
and enables them to tide over lean times, but once the market turns around,
their total rental bill could be higher as retail sales pick up.'
CB Richard Ellis director (retail
services) Letty Lee observes that retailers are increasingly being
challenged by the economic downturn which is driving down tourist numbers.
'Coupled with the H1N1 virus, retailers
face the prospect of not being able to achieve their projected turnover. The
increase in supply is another challenge. Particularly for existing
retailers, they will have to brace themselves for fresh competition, fresh
concepts and malls incorporating new and different retail experiences,' she
added.
Mr Yeo reckons that generally, retail
sales at suburban malls have fared better than on Orchard Road over the past
six to nine months. Retail turnover of suburban malls may have fallen by
5-15 per cent on average over this period, 'with the impact being a little
bit more on fashion retailers than others such as those in groceries and
F&B'.
'As for retailers along Orchard Road, for
those relying heavily on tourists and big-ticket items, I wouldn't be
surprised if their sales drop has been about 15-20 per cent on average over
the past six to nine months, although a few may even have experienced a more
substantial drop of 20-40 per cent.
- 2009 May 25 BUSINESS
TIMES
Orchard Rd rents fall 1.9% in Q4
Prime Orchard
Road rents fell 1.9 per cent quarter-on-quarter to an average of $36.10 per
sq ft per month (psf pm) in Q4 2008, property firm CB Richard Ellis (CBRE)
said yesterday.
It is the first time these rents have
headed south since Q4 2003, it said. They also contracted 0.8 per cent
year-on-year, reversing their 5.4 per cent growth in Q4 2007.
Prime suburban rents dipped a more
moderate one per cent quarter-on-quarter to an average of $29 psf pm in Q4
2008. The last time quarterly suburban mall rents contracted was Q2 1999.
For the whole of 2008, they grew one per cent.
'Retail rents were resilient in previous
economic downturns (such as Sars, and the Asian Financial Crisis) due to
limited supply then,' CBRE said in a report released yesterday.
'But going forward, weak demand is likely
to coincide with an increase in supply. As such, downward pressure on rents
is unavoidable. We expect renegotiations to commence in 2009, after the
Chinese New Year festivities.'
The main danger to rents, analysts say,
is the new supply of retail space set to kick in over the next two years.
According to CBRE, known supply for 2009-2012 is 6.36 million sq ft, with
most of this - 80.5 per cent or 5.13 million sq ft - completing in 2009 and
2010.
'Developers and landlords, especially
those with developments along Orchard Road, face increasing competition from
the imminent supply of new malls, shops within the integrated resorts as
well as refurbished shopping centres,' CBRE noted.
Retailers are now more resistant to
further rental increases, as local consumers, spooked by the prospects of
unemployment and lower wages, have cut spending, it said. In addition, the
economic recession has led to a drop in tourist arrivals.
In the light of this, CBRE reckons that
prime Orchard Road rents could contract 5-10 per cent in the first half of
2009. At prime suburban malls a 2-3 per cent decline is likely, it said.
Suburban rents will fall more moderately due to a ready population catchment,
steady demand for basic necessities and comparatively less competition from
new supply.
However, some resilient retailers could
take the opportunity presented by lower rents and costs to expand their
retail network, CBRE said.
'Certain trades will continue to thrive,
despite the gloomy outlook. Supermarkets, hypermarts and F&B in suburban
malls might emerge more hardy, particularly those with unique F&B themed
eateries,' it said. -
2009 January 1 BUSINESS
TIMES
Orchard Road is Singapore’s premier shopping street and a popular
destination for visitors. Stretching close to 2km, Orchard Road today has
about 800,000sqm gross floor area (GFA) of shopping and entertainment
attractions, complemented by hotels, offices and residences along wide shady
boulevards. Coupled with a lively street culture, Orchard Road offers a
unique shopping experience in a tropical setting.- URA
Orchard Road is world's 13th most expensive shopping street
Orchard Road has become the world's 13th most expensive shopping street -
up a notch from last year - after rental rates in the area rose more than 13
per cent. Average rental rates in Orchard Road have risen to $39 per square
foot per month, said Cushman & Wakefield in its annual Main Streets
Across the World report. This is up 13.2 per cent from last year, making
Orchard Road the 9th most expensive retail street in Asia [sic The
World].
'The strong performance of the economy, increase in tourism and overall
optimism in Singapore have led to increased consumer spending and
contributed to the vibrant retail scene we have seen since the economy
recovered in 2004,' said Donald Han, managing director of Cushman &
Wakefield in Singapore. Global brands and local retailers are jostling for a
prime presence in Singapore's key retail hub, he added. 'With the limited
supply in Orchard Road, there is only one direction rentals can go - up.'
Main Streets Across the World tracks the rental rates of 233 of the
world's top shopping locations in 47 countries. Its global league table is
drawn up by taking the most expensive location in each country. The report
showed that rental rates in 97 per cent of the locations have stayed stable
or risen in the past year. The data is based on rent on a standard unit with
a frontage of six metres and depth of 25 metres.
The region showing the highest rental increases is Asia, where rents are
up 20 per cent in June 2006 from a year ago. The most expensive retail area
in Asia is Causeway Bay in Hong Kong, where rents are at an average US$1,134
per square foot per year. Causeway Bay is also the second most expensive
area in the world, retaining its 2005 spot.
Tokyo's Ginza district stayed as the world's 5th most expensive area,
with average rentals of US$652 per sq ft per year.
Seoul's Myeongdong district fell from 8th place to the 9th, as rentals
stood at US$376 per sq ft per year.
The area which saw the largest increase was Khan Market, in New Delhi. It
rose 17 places to become the 24th most expensive street in the world.
Sebastian Skiff, Cushman & Wakefield's head of retail in Asia, said:
'With many of the markets still considered to be emerging economies for
international retail, we foresee this upward trend in rents continuing this
year, matched with an improvement in the quality of product.'
The world's most expensive street was New York's 5th Avenue, which
averages rentals of US$1,350 per sq ft per year.
- 2006 October 26 SINGAPORE
BUSINESS TIMES
Orchard Road is inching up the rankings
among the world's most expensive shopping destinations
With average retail rental of more than US$2,600 per square metre per year,
Orchard Road has the world's 14th most expensive retail space, up from
number 15 last year. That is according to annual report by Cushman and
Wakefield.
Topping the list is New York City's 5th Avenue, followed by Causeway Bay in
Hong Kong. Champs Elysees in Paris is third, followed by London's New Bond
Street. Tokyo's Ginza ranks fifth.
The report tracks retail rents in the world's top 237 shopping locations
across 47 countries.
Among the findings for Singapore's famous shopping street, Orchard Road
witnessed an increase of 6.3% in rent from a year ago.
On average, rental there cost an average of S$34 per square foot a month.
Cushman says shops in Paragon, Wisma Atria and Ngee Ann City which have a
street view can fetch rental of as much as $50 per square foot.
It says the high rental rates are due to strong demand from local and
international retailers for prime retail space.
Said Donald Han, managing director of Cushman & Wakefield: "This is
due to Orchard Road's solid reputation as one of the premier shopping belts
in the world.
"Foreign retailers all know Orchard Road. Everybody wants to have a
piece of Orchard Road and to set up shop here."
Cushman noted that prime retail rents in Singapore have been on the uptrend
over the past five years and are expected to continue its northward ascent
for the next 12 months.
Recently, the Urban Redevelopment Authority released two sites along Orchard
Road to be developed into retail space.
Cushman says this will be a welcome relief particularly for retailers in
search for prime space. - 2005 CHANNEL
NEWS ASIA
Orchard Road moves up a spot from last year as
average monthly rents rose 6.3%
Orchard Road is now the world's 14th most
expensive location in which to rent retail space, up a notch from its 15th
position a year ago, according to an annual report by Cushman &
Wakefield's European division.
Average retail rents on Orchard Road rose 6.3 per
cent year-on-year to $34 psf a month. New York's Fifth Avenue maintained its
top ranking in the report by Cushman & Wakefield Healey & Baker. In
second position was Hong Kong's Causeway Bay, overtaking the Avenue des
Champs Elysees in Paris. Rents on Causeway Bay jumped 90 per cent year on
year.
Shanghai's Nanjing Road (East) was ranked 20th and
Suria KLCC in the Malaysian capital, 26th.
The report, Main Streets Across the World 2005,
tracks retail rents in the world's top 237 shopping locations across 47
countries. The report's global league table is drawn up by taking the most
expensive location in each of the countries monitored.
Commenting on Singapore moving up a notch in this
year's survey, Donald Han, managing director of Cushman & Wakefield's
Singapore office, said: 'Demand from local and international retailers for
prime shopping centres remains strong. This has pushed occupancy levels to
the brink of full capacity for these malls. Prime retail rents have been on
the uptrend over the past five years and are expected to continue their
northward ascent for the next 12 months.'
He noted that the government's recent tender
launches for two sites along Orchard Road is 'a welcome relief, particularly
for retailers in search for prime space'.
Projects on the new sites at Orchard and Somerset
MRT stations are expected to generate about 780,000 sq ft of retail space
from 2009 onwards. However, Mr Han does not expect the new supply to soften
prime retail rents on Orchard Road over the medium term.
'This is due to Orchard Road's solid reputation as
one of the premier shopping belts in the world. Everybody wants to have a
piece of Orchard Road and to set up shop here.' -
by Kalpana Rashiwala SINGAPORE
BUSINESS TIMES 27 Oct 2005
Orchard Road is the world's 15th most expensive
shopping street. Fashion capitals New York and Paris clung to their pole
positions, while Hong Kong came in third, according to a survey by Cushman
& Wakefield.
In its annual survey, Main Streets Across The
World, Cushman & Wakefield gave the lowdown on retail rents in 45
international shopping cities. Orchard Road was the 9th most expensive spot
in Asia-Pacific to set up shop with rents of US$2,363 per square metre a
year.
But the city-state's main shopping strip trailed
behind Hong Kong's Causeway Bay, Sydney's Pitt Street Mall, Tokyo's Ginza,
Seoul's Mydeongdong and Kangnam Station, Brisbane's Queen Street Mall,
Melbourne's Bourke Street and Tokyo's Omotesando. It is, however, ahead of
Tokyo's fashionable Shibuya.
'Most countries in the region have experienced
solid economic recovery over the past 12 months and many international
retailers have reacted quickly to expand their presence in places like Hong
Kong, Japan and Singapore,' said C&W's Asia research director John Su.
'Rentals in these cities have resulted in significant increases since the
middle of last year.'
Rents in New York zoomed past the US$10,000 psm a
year mark to US$10,226. Coming a distant second is Paris's famed Avenue des
Champs Elysees lined with its designer wares at US$7,648. Rents in Dublin's
Grafton Street leapt to US$4,103, putting it in 5th spot, up from 10th
position in 2003.
In Asia-Pacific, Singapore was ahead of Kuala
Lumpur's Suria KLCC, Mumbai's Linking Road, Western, and Bangkok's City
Centre. Singapore slipped one spot down to 15th from 14th last year. Malls
along the Orchard Road stretch include Ngee Ann City, Paragon, Wisma Atria
and Centrepoint.
'Despite the healthy increase of 9.6 per cent in
Singapore's rents to US$31.50 per square foot a month, the other cities have
outperformed that, resulting in a one-notch drop,' said C&W Singapore
managing director Donald Han. 'For example, Hong Kong's Causeway Bay went up
by 50 per cent and Tokyo's Omotesando jumped 70 per cent.'
C&W said rents rose in two-thirds of the 45
locations surveyed with falls in about 10 per cent.
'The inflationary effect of rising oil prices will
put further upward pressure on interest rates,' said C&W head of
research David Hutchings.
'This may impact countries where debt is running
at high levels as shoppers will not have so much money in their pockets to
spend.
'Saying that, the outlook is still more optimistic
than a year ago; the number of retailers looking for a unit in the world's
super league of shopping streets shows no sign of abating, while retailers
continue to flow into emerging markets in Europe and Asia.'
-
by Andrea Tan SINGAPORE
BUSINESS TIMES 6 Nov 2004
LANDOWNERS
268 Orchard Rd may spice up
shopping belt
Ngee Ann Development (NAD) is said to be considering a redevelopment of
268 Orchard Road, which it bought for $135 million last year from CapitaLand.
Sources toldBusiness
Timesthat it's also exploring the possibility of teaming up with
owners of prominent neighbouring properties, including Crown Prince Hotel,
The Heeren and Wellington Building, for a bigger redevelopment scheme
fronting Orchard Road.
'However, it may be difficult to persuade
neighbouring owners who may have their own priorities and agendas, to join
forces. So NAD may have to be prepared to proceed with a redevelopment on
its own,' says a market watcher.
The Heeren is a relatively new project and its
owner, the Swee Cheng group, is unlikely to see the economics of
redevelopment for now. However, Swee Cheng also owns Wellington Building.
This ageing asset, which is on the other side of 268 Orchard Road, is ripe
for redevelopment.
In front of Wellington Building is Crown Prince
Hotel, with frontages on both Orchard and Bideford roads. The 21-year-old
hotel, which has some retail space, could also use a revamp. Crown Prince
Hotel recently saw a new stakeholder emerging when a consortium headed by
US-based fund manager Farallon Capital Management settled $180 million of
debt which had been extended to the hotel's owner.
It remains to be seen if the consortium's stated
plan of injecting fresh funds to reinvigorate Crown Prince Hotel could
include partnering NAD for a joint redevelopment with 268 Orchard Road,
which is 32 years old.
'This would be similar to how Singapore Press
Holdings merged the Paragon and Promenade buildings to create more
street-front space and a bigger presence on Orchard Road,' says a seasoned
property consultant.
A joint redevelopment of the four properties - 268
Orchard Rd, Crown Prince Hotel, The Heeren and Wellington Building with a
combined site area of about 136,000 sq ft - could yield a new project with a
maximum gross floor area, or GFA, of about 700,000 sq ft.
This includes a 5 per cent bonus plot ratio that
the combined site would qualify because of its size, says a property
consultant. Plot ratio specifies how much GFA can be built on a site. All
four sites are zoned for commercial use under the 2003 Master Plan.
Some market watchers went so far as to suggest NAD
could extend its tie-up to include The Ascott Group's Cairnhill Place behind
the four properties. A combined integrated development of all five sites -
possibly including a residential or service residence component - could
generate a maximum GFA of about one million sq ft.
NAD is a joint venture between Ngee Ann Kongsi and
Japan's Takashimaya group and is the developer of the massive Ngee Ann City
project in the 1990s. In the event that none of its neighbours are willing
to join forces or sell their properties to NAD for a redevelopment, the
question is whether NAD would then go ahead with redeveloping 268 Orchard
Road on its own.
The existing building has already optimised the
site's development potential. In fact, property sources say the 20-storey
building's present GFA of about 185,000 sq ft exceeds the 146,636 sq ft
maximum allowed for the plot under the 2003 Master Plan.
Property consultants reckon that in such a case,
the authorities would usually allow a redevelopment scheme to retain the
existing GFA.
Even so, NAD could still benefit from redeveloping
268 Orchard Road if it manages to extract more net lettable area from the
same GFA. In addition, a spanking new building should be able to fetch
higher rents.
Most leases at 268 Orchard Road expire by year's
end, with the rest ending early next year. It would be opportune for NAD to
begin a redevelopment after that - if it decides to go ahead.
Or it could wait longer to persuade some of its
neighbours to do a joint redevelopment. In that case, NAD could start
signing leases again for 268 Orchard Road until it's time to knock down the
building.
The property's most prominent tenant is Citibank,
occupying the basement, first, second and 16th floors. Its lease expires in
November. The bank has already inked a lease to take up four levels at
MacDonald House, also on Orchard Road, across the road from Dhoby Ghaut MRT
station. - by Kalpana Rashiwala
BUSINESS
TIMES 31 Jan 05
The Brunei Investment Agency (BIA) could be the
biggest winner of all the building owners in the Orchard/Scotts Road area if
it redevelops its two Scotts Road properties to their maximum potential,
according to a study by Jones Lang LaSalle.
BIA owns Grand Hyatt Singapore and, across the
road, the Royal Plaza on Scotts hotel and the adjoining DFS store. If it
were to redevelop these two sites to the limit allowed under the current
Master Plan, it could generate an additional 424,100 sq ft in gross floor
area (GFA) beyond the buildings' combined existing GFA of 1.2 million sq ft.
Far East Organization emerged second in a ranking
of property owners who stand to gain the most additional space from
redevelopment. The property giant and subsidiary proprietors (for buildings
in which Far East has sold some strata titled units) own properties that can
generate an additional 370,400 sq ft from redevelopment.
The seven buildings in the Far East stable which
JLL included in its survey are Far East Plaza, Lucky Plaza, Far East
Shopping Centre, Orchard Plaza, Orchard Shopping Centre, Orchard Parade
Hotel and Orchard Parksuites. The last two are wholly owned by Far
East-controlled vehicles.
Tang Holdings and listed retailer CK Tang, which
own the Singapore Marriott Hotel and Tangs department store complex, ranked
third. They could potentially build 236,000 sq ft extra space from
redeveloping their prime site at the junction of Orchard and Scotts roads.
Hotel Properties (which owns Forum, Hilton
Singapore and Le Meridien hotel and mall) and Hong Fok (owner of
International Building) were in fourth and fifth spots.
Who's the biggest winner in terms of percentage
increase in GFA? Great Eastern Life Property Services, whose Orchard Emerald
could be redeveloped into a project with 130 per cent more GFA than the
existing building.
Hong Fok (for International Building) and Tang
Holdings/CK Tang were in number two and three positions respectively, with
potential gains of 73 per cent and 37 per cent in GFA. They were followed by
BIA, whose potential increase in floor area for its two Scotts Road
properties amounts to 35 per cent. Bonvests Holdings and its chairman Henry
Ngo could see a 25 per cent enhancement from redeveloping Liat Towers and
Orchard Building.
While these buildings stand to reap fairly good
gains in floor area from redevelopment, many other buildings in the Orchard/Scotts
Road belt, are already developed to the maximum GFA allowed under Master
Plan 2003 - or very close to it.
In some cases, the existing floor area is more
than the current limit stipulated. In such cases, however, URA may allow a
new development to retain the existing GFA, subject to conditions. Factoring
in all of this, JLL Singapore managing director Yu Lai Boon said that on the
whole, building owners in Singapore's prime shopping district stand to
achieve an increase of only 1.3 million sq ft or about 7 per cent in GFA if
they were to all redevelop their properties to the Master Plan limit.
This hardly leaves owners with an incentive to
redevelop - considering the huge capital expenditure involved and the income
they would have to forgo while their properties are being redeveloped.
A developer summed things up: 'Buildings on
Orchard Road are either safeguarded as hotels and therefore can't be
redeveloped for other uses, or are strata-titled with fragmented ownership,
making it a tough proposition for redevelopment, or have maxed out (or
nearly maxed out) in permissible gross floor area. So it's not viable to
redevelop.' JLL's study also showed that Far East and its subsidiary
proprietors are the top owners of buildings in the Orchard area, with a
combined 2.6 million sq ft for the seven properties included in the study.
In second spot was Ngee Ann Development which owns
73 per cent of Ngee Ann City and which earlier this year bought 268 Orchard
Road. The two buildings add up to 2.3 million sq ft GFA, although 27 per
cent of Ngee Ann City was last year securitised in a deal spearheaded by
German insurer Ergo. Overseas Union Enterprise (owner of Mandarin
Singapore), BIA and HPL ranked third, fourth and fifth.
- by Kalpana Rashiwala SINGAPORE
BUSINESS TIMES28 Oct 2004
More oomph for Orchard:
URA has released prime site at
Orchard Turn
S'pore to sell more Orchard Road land
Singapore
said on Tuesday it would sell more land along its prime Orchard Road
shopping strip for a retail mall, signalling rising confidence in its
reviving property market.
PREVIOUS
SALES
In
December, Singapore's CapitaLand and Hong Kong's Sun Hung
Kai Properties secured a 1.8-hectare site for $1.38 billion
or $10,976.25 per sq m, fighting off competition from the
likes of Indonesia's Lippo and Cheung Kong (Holdings).
The second plot along
Orchard Road, adjacent to the site currently on offer, was
sold in January to privately-held developer Far East
Organisation for $421 million or $11,682.62 per sq m.
>> ORCHARD
TURN
This would be the Government's third commercial land
sale along the thoroughfare in the last six months. The last two sites set
record prices and pulled in $1.8 billion (US$1.11 billion) for state
coffers.
The Urban Redevelopment Authority (URA) said the
0.7-hectare plot above the Somerset subway station would be placed on its
reserve list and will be up for auction only when a buyer places an opening
bid that surpasses an undisclosed minimum level set by the government.
At least 60 percent of the maximum 39,410 square
metre gross floor area of the development will be for retail and
entertainment use.-- REUTERS
Rents at two upcoming Orchard malls could
hit $60 psf
Developers say competition for retailers or shoppers will be minimal
Retailers who take
up space in Orchard Road's two new malls - slated to open in 2008 - can
expect to pay as much as $60 per sq ft per month (psf pm).
Ion Orchard:
The $2 billion project will feature duplex flagship stores of six
carefully selected luxury brands
Yesterday, both CapitaLand's Ion Orchard
and Far East Organization's Orchard Central unveiled their retail concepts.
Ion Orchard - the newly named retail
component of a $2 billion retail and luxury-residential project developed by
Singapore's CapitaLand and Hong Kong's Sun Hung Kai Properties - will
feature duplex flagship stores of six carefully-selected luxury brands.
These stores will be among some 400
retail, F&B and entertainment stores occupying some 660,000 sq ft of net
lettable area on eight levels.
Rentals at Ion Orchard will range from
'$20 to over $60 psf pm', said CapitaLand Retail chief executive Pua Seck
Guan. 'We have already received offers from many retailers, but we are not
in a position to disclose anything,' he said. 'We are confident that we will
have close to 100 per cent occupancy by the time we open.'
A soft opening is expected by end-2008,
with the grand opening scheduled for first-half 2009.
Over at the other end of Orchard Road,
Far East Organization yesterday began officially marketing Orchard Central -
almost one year after it first announced the mall's name.
About 500 retailers turned up at the
marketing launch. Orchard Central is expected to be completed in the third
quarter of 2008.
Danny Yeo, executive director of property
consultancy Knight Frank, expects rents at the mall to be $18-$60 psf pm.
The mall will boast a unique 'cluster'
concept, with shops grouped into eight different clusters - such as Youth,
Highlife and Food Haven - occupying a total net lettable area of 250,000 sq
ft. There will be no anchor tenants like large departmental stores,
supermarkets or cinemas.
And in a first for Singapore, all shops
at Orchard Central will be open until 11pm everyday. 'We told the retailers,
if you sign up with us it will be from 11am to 11pm' said Vivienne Tan,
president of Far East Retail Consultancy.
Both malls expect foot-falls of 80,000 to
100,000 on weekdays and around 20-50 per cent more shoppers on Saturdays and
Sundays. Although both malls will open around the same time, the developers
maintain there will be no competition for retailers or shoppers.
'Orchard Central has a very different
positioning (from Ion Orchard),' said Far East's Mrs Tan. 'And we are at the
other end of Orchard Road.'
Ion Orchard is located right on top of
Orchard MRT station, while Orchard Central is close to Somerset MRT station.
Retailers, said Mrs Tan, can have a store in each of the malls.
Similarly, CapitaLand's Mr Pua said that
with no major shopping centre having come up in Orchard Road for more than a
decade, there will be a lot of pent-up demand for the new malls. 'In terms
of location, we have a better location.' He added that CapitaLand could
eventually sell its 50 per cent stake in Ion Orchard to its listed real
estate investment trust (Reit) CapitaMall Trust (CMT).
'CapitaLand's strategy is very clear - we
have an asset light strategy,' he said. 'At the end of the day, we would
like to monetise CapitaLand's stake.' -SINGAPORE
BUSINESS TIMES 17 July 2007