Orchard Central tenants come up empty

Observers cite lack of anchor tenant and complicated layout as reasons for poor business

The empty corridors at Orchard Central make for a woeful sight. One shop has already closed, and tenants have asked landlord Far East Organization for rental rebates. — ST PHOTO: RAJ NADARAJAN

THE tenants at Orchard Central mall, which is barely a year old, say they are struggling to keep their businesses afloat.

The corridors outside the shops are quiet, and walk-in customers are a rare breed – a stark contrast to the buzz at 313@Somerset and Ion Orchard, two malls which also opened last year.

At least one shop at Orchard Central, Fox Salon, has already closed, and tenants say about 70 of them have gone to landlord Far East Organization (FEO) to plead for rental rebates.

Other shops in Orchard Central seem headed the same way as Fox Salon, but some tenants are holding on, for fear of incurring the penalty for breaking their leases.

A beauty parlour owner, who gave her name as Ms Ng, said: ‘We really want to leave this place. How are we to survive here for three more years?’

Each day she stays, she loses about $500, she said.

Her fourth-floor neighbour, Optical 88, is seeing an average of just four customers a day, fewer than at its other outlets in the heartlands.

Only a few shops seem to be keeping their heads above water. One is hair salon La Coco, which markets itself to Korean expatriates. It said it gets about 40 customers a day.

A spokesman for the salon said its Korean stylists keep the regulars returning, but if it had to rely on walk-ins, it too would go under.

Many other tenants declined to comment, saying their landlord had warned them against talking to reporters. This was denied by FEO, which said it was ‘reviewing the performance of the outlets on a month-to-month basis’ and ‘granting rental assistance when appropriate’.

The mall, together with 313@Somerset and Ion Orchard, opened to great fanfare last year, hoping to benefit from a shopping frenzy as the economy emerged from a slump. It pulled in a million shoppers last December.

That was its peak number, said FEO, but it was also the traditional Christmas shopping period. In addition, FEO had pumped $5 million into advertising and promotions to get it off to a good start.

Orchard Central welcomed its first shoppers last May, departing from standard mall conventions in two ways: One was that it was a ‘vertical mall’, with 11 storeys of shops above ground. The other was its absence of anchor tenants.

Mall watchers say these factors may be why it is doing badly. Mr Colin Tan, director of property consultancy Chesterton International, said a mall needs a crowd puller like a cinema or a big department store. He also said that Orchard Central’s labyrinthian layout does it no favours.

Auditor Teng Oon Tang, 24, who said she is unlikely to go back, said: ‘Whenever I go there, I get lost or end up in a dead end. The only good thing it has are the comfortable sofas.’

Mr Ooi Eng Peng, chief executive of Lend Lease, which designed the neighbouring 313@Somerset, said his mall was built for easy navigation and to show off the shops. ‘We’re really happy with the mall. It has caught on as Singaporeans’ favourite.’

Business is booming there, and at Ion Orchard. Nine million shoppers have visited 313@Somerset in three months, and Ion Orchard has been packing in 4.5 million visitors a month.

A check with their tenants confirmed this.

Marche at 313@Somerset says it serves more than 1,500 diners a day. Very Wooonderland, a clothing store in Ion Orchard, averages 100 customers daily and makes about $30,000 a month.

Source : Straits Times – 4 Mar 2010


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