Tag Archives: Singapore Retail

Retail rents stay steady across island

RETAIL rents in the prime Orchard and Scotts roads belt, other city areas and the suburbs were all unchanged in the first quarter of this year, according to DTZ Research.

They are still down as much as 10 per cent in some areas from their Q3 2008 peaks, but have now stabilised across the island, DTZ’s data show.

In Q1, the gross rent for prime first and upper-storey retail space in the Orchard and Scotts belt remained at $39.70 per sq ft per month (psf pm) and $20.50 psf pm respectively.

DTZ says the market managed to absorb new supply – from the opening of Ion Orchard and 313@somerset – that came on stream in 2009 and in Q1 this year.

First-storey rents in the Orchard and Scotts belt are down about 6 per cent from the peak at Q3 2008.

Rents in ‘other city areas’ took an even bigger hit during the economic slowdown, falling about 10 per cent from Q3 2008.

But the slide has stopped after five consecutive quarters of decline. Prime first and upper-storey retail space in these areas remained at $24.40 and $14.00 psf pm in Q1 2010.

Rents in suburban areas, which fell only marginally during the downturn, also held firm during Q1 – at $33.50 and $22.80 for first and upper-storey space respectively.

According to Chua Chor Hoon, head of DTZ’s South-east Asia research team, the retail industry has been boosted by more tourist arrivals and rising consumer confidence this quarter.

‘As tourist arrivals are expected to grow and local consumption improves, demand for retail space is likely to increase,’ Ms Chua says. ‘On the back of a brighter outlook for the retail industry, prime retail rents are expected to rise moderately.’

DTZ expects some 2.3 million sq ft of new retail space to be added this year, 15 per cent lower than the 2.7 million sq ft added in 2009.

Source : Business Times – 23 Mar 2010

Orchard Central: Love it, hate it

It has been roundly criticised for being user-unfriendly, but the owners and architects behind Orchard Central are unfazed by the brickbats.

They say the design of the mall is ‘ground-breaking’ for Singapore and believe shoppers will grow to appreciate it in time.

Orchard Central’s shopping experience will also be further enhanced when an adjacent site is built and linked to the mall, they added.

‘As the mall design is ground-breaking, we are not surprised to receive such feedback from shoppers,’ said Mr Tai Lee Siang, director of home-grown architectural firm DP Architects, which designed the mall.

‘It will take time for them to become familiar with and like a mall that is less than conventional.’

Orchard Central opened last May at a cost of more than $700 million. At about 36,000 sq m, it is the smallest of three new shopping centres that have sprung up in Orchard Road.

Ion Orchard, which opened last July, is about 61,300 sq m, and the mall, together with its accompanying luxury residence, The Orchard Residences, cost $2 billion to build.

The mall 313@Somerset is about 39,400 sq m and opened last December at a cost of more than $900 million.

In a recent newspaper report, Orchard Central’s tenants said they were hurting from poor business and few walk-in customers. At least one shop, Fox Salon, has closed and about 70 tenants were said to have gone to the landlord to plead for rental rebates. Shoppers said the mall’s confusing layout kept them away.

Mr Tai said the floor plans for the different levels vary according to themes ranging from food to beauty. These thematic clusters are designed to form interlocking spaces rather than uniformly stacked areas.

Of the unusual layout, Mr Chng Kiong Huat, executive director of development and planning at Far East Organization, which owns Orchard Central, said: ‘This is a long, narrow site, not a square site that is easy to handle, so we knew we could not use a traditional model and hope for the best.

‘We embraced the challenge as an opportunity to create something distinct and new.’

He said Far East bid for the land because it was a chance to participate in the rejuvenation of the Orchard shopping belt. Far East also owns Pacific Plaza in Scotts Road and had built Far East Plaza and Far East Shopping Centre in the area.

Mr Chng added that Orchard Central’s location was a draw because it houses Discovery Walk. This is a sheltered shopping street connecting Orchard Central, 313@Somerset, and the Specialists’ Shopping Centre and Hotel Phoenix site. It is jointly owned by them.

DP Architects worked with Orchard Central’s narrow piece of land by building vertically, resulting in an 11-storey mall, the tallest all-retail building here. The small land area also meant a circular carpark ramp instead of a straight one, which shoppers have complained is too steep.

Mr Tai said 11 floors with the same repetitive floor plan would have been ‘quite boring’.

‘To create visual excitement and spatial sensation, we zoned the space and matched the architecture of each zone to the tenant profile.’

Hence, the youth area has an edgy design – a winding ramp built around its own atrium, with small shops selling knick-knacks and apparel along the ramp.

The cluster of beauty and wellness shops, on the other hand, is ensconced in a far corner to offer customers privacy.

Vertical malls, though novel here, are common in population-dense cities such as Tokyo, and the architects drew inspiration for their design from malls in these cities, such as Herbis Osaka, Mr Tai said.

But shoppers’ criticisms have not fallen on deaf ears. Mr Chng said Far East has added more lighting to increase the visibility of shops and put up more signs at a cost of almost $4 million.

It is also reviewing the performance of the outlets monthly and granting rental help when appropriate. It plans to pump about $5 million this year into advertising and promoting the mall.

Mr Chng added that Orchard Central’s shopping experience will be further enhanced when the adjacent site, previously occupied by Specialists’ Shopping Centre and Hotel Phoenix, is built.

OCBC Bank, which owns the land, recently announced that it was in talks with construction and property group United Engineers Limited to build a hotel and mall there.

Far East has worked with OCBC to have link bridges on the upper floors that connect Orchard Central to OCBC’s future development. Currently, the bridges lead straight into a partition wall separating the mall from the adjacent site.

When the OCBC development is ready, the partition will be removed and shoppers will be able to walk around, with the Discovery Walk between the two buildings acting as an atrium.

Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic, noted the importance of malls having user-friendly designs.

‘If the layout does not register positively in the minds of customers, they might not return, especially in a competitive shopping area such as Orchard Road,’ he said.

Mr John Ting, former president of the Singapore Institute of Architects, noted that mall layouts here are becoming ‘more interesting’. Orchard Central, he felt, ‘is too ahead of its time here and shoppers are not yet sophisticated enough to appreciate it’.

Source : Sunday Times – 14 Mar 2010