Far East Shopping Center on Orchard Road in Singapore on Thursday, April 11, 2024.
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Singapore’s Far East shopping center along Orchard Road has seen better days.
Despite being a five-minute walk from Orchard MRT station, one of Singapore’s busiest subway stations, the 42-year-old mall suffers from poor footfall. About a fifth of the units are vacant and for sale or rent, and the occupants are more likely to be maid agencies than the high-end stores or restaurants associated with a major shopping district.
The same sense of emptiness pervades the many old malls along the upper reaches of Orchard Road, the posh Tanglin Residence near the Singapore Botanic Gardens. From the area where Orchard MRT is located.
Orchard Road, Singapore’s main shopping street, is 2.2 kilometers (1.3 mi) long but most of the activity takes place at the lower end, as well as in selected malls connected to subway stations by underground walkways. Far East Shopping Center is not connected to the Orchard MRT unlike many of its neighbours.
However, this situation is about to change. Many of the older properties along Orchard Road are expected to be redeveloped in the coming years following a number of financial incentives from Singapore’s land planning agency, the Urban Redevelopment Authority (URA). But the investment required will still be significant, likely reaching billions of dollars due to the high cost of land and construction in Singapore.
New investment
Hotel Properties Limited (HPL), in Tanglin section of Orchard Road, Controlled by billionaire Ong Bang Seng, last year it won approval to demolish three of its properties and build one. A massive 114,150 square meter mixed-use development Two tower buildings with a hotel and residential units as well as retail and office space.
The two properties, Voko Orchard Hotel and Forum The Shopping Mall, share approximately 180 meters of frontage along Orchard Road. Last year the forum alone was worth 948 million Singapore dollars ($705.9 million).
However, redevelopment has not yet begun.
City Developments Limited (CDL), one of Singapore’s largest listed developers, earlier this year bought the remaining owners of Delphi Orchard, a 40-year-old, 11-storey retail and residential building. is, in which the value of the property was 439. million Singapore dollars.
Analysts expect CDL to redevelop Delphi Orchard. With the nearby Orchard Hotel and adjacent mall held by CDL Hospitality Trust, a real estate investment trust managed by CDL.
Arts, cultural and lifestyle offerings
“The Tanglin area is envisioned as a mixed-use neighborhood with a strong arts and crafts flavor. Locals and tourists alike can look forward to enhanced arts, cultural and lifestyle offerings as building owners respond to evolving needs and offer new uses to meet the preferences of visitors,” Singapore’s URA said in a written response to questions from CNBC.
Orchard Road area in Singapore on Monday, July 8, 2024. The Orchard Road shopping strip is a global center for tourism and high-end retail that, along with the country’s rise, is reshaping the nutmeg groves and pepper farms that were once cultivated. A century ago.
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Beginning in 2025, the URA will begin work on a series of improvements across the Orchard Road area, including a 6km “green connection” connecting the Singapore Botanic Gardens near the other end of the Orchard to Istana Park and Fort Canning Park. ” included. the road
Richard Goh, executive director of Pacific Eagle Real Estate, said the Tanglin section of Orchard Road could be made more attractive with covered walkways and “experiential spaces that go beyond traditional retail and F&B.” [food and beverage]”
He recalled a time when the Tanglin area was popular with shoppers, citing attractions such as the old Rasa Singapore Food Centre, which housed many of Singapore’s popular hawker stalls. Rasa Singapore was closed in 1989 to make way for new developments.
Pacific Eagle, controlled by the family of Indonesian billionaire Sukanto Tanoto, is redeveloping the Tanglin shopping centre, which it acquired in 2022 for S$868 million.
Challenges
A challenge facing the URA and private sector developers seeking to redevelop the upper reaches of Orchard Road is the ownership structure of many older commercial buildings. Rather than being under a single holding company, these properties are divided into smaller class units held by different owners.
Such properties require the support of at least 80% of the class owners to sell. Buyers must also agree on a minimum asking price before starting a collective sale.
Another speed bump involved negotiating with the URA for incentives under the latter’s Strategic Development Incentive Scheme, which aims to encourage landlords to redevelop older properties mainly adjacent to the central business district and Orchard Road areas. To do is to get.
The URA said it was looking for new developments that would inject new lifestyle or retail offerings into the planned pedestrian networks. Eliminate gaps in, or improve access to, public areas such as parks and waterways.
Earlier this year, the collective sale of the Far Eastern shopping center to an investment firm linked to Chinese tycoon Du Shuanghua was canceled after the buyer. Reportedly failed to obtain URA approval for increase in gross floor area of new development.
“If the URA wants to speed up the pace of redevelopment along Orchard Road, there will need to be some changes to the programs,” said Jeremy Lake, managing director of investment sales and capital markets at Sewells Singapore.
Savills, which brokered the collective sale of Tanglin Shopping Center and Delfi Orchard, recently managed the sale of the Concorde Hotel, an older property. S$821 million to HPL at the other end of Orchard Road.
Beat the heat
PLP Architecture director Tina Keo suggested building shelters along the Tanglin stretch to protect pedestrians from Singapore’s constant heat, humidity and frequent rain. With global warming, conditions at street level will worsen over time.
“We can create more shelters along the pedestrian walkways, for example with dynamic canopies and retractable canopies that can be activated during hot sun and retracted at night to create a beautiful Let the lighting fill the street scene,” he said.
Qiu, who is based in London but has projects in Singapore, noted that malls connected to the Orchard MRT have a distinct advantage in the Tanglin area as people can move from one place to another in a cool air-conditioned environment.
“People will use spaces that are more comfortable and in places like Singapore, that can be more easily achieved in a formal indoor environment,” he said.
