Saturday, November 1, 2008

New Orchard Mall 60% Leased Ahead Of Opening

Source : The Straits Times, Oct 31, 2008

Orchard Central and other upcoming malls to offer retail space even as economy slows down

ORCHARD Central, the first of three new malls springing up in Orchard Road, is already 60 per cent leased five months ahead of its opening - despite the murky outlook for the economy, including retail spending.

Retail sales have started to slow, albeit slightly, just as Singapore's premier shopping belt is set to boast three new, quality malls.

Lend Lease is building 313@Somerset next door while CapitaLand and Hong Kong's Sun Hung Kai are building Ion Orchard on top of Orchard MRT station.

It has been a decade since a mall was built from scratch in Orchard Road, said Ms Susan Leng, Far East's deputy director, retail management.

Orchard Central, which has 12 floors and two basements, is expected to open in April, ahead of the other two malls.

Far East is working hard to set the mall apart. It aims to open till 11pm daily and its rooftop garden and a covered walkway will be open to the public 24 hours.

The mall even has a four-storey-high rock-climbing wall aimed at attracting its target group of shoppers aged 21 to 35.

Mr T.K. Goh, founder of The Happy People, which is behind the Ben & Jerry's stores in Singapore, will be setting up the mall's biggest food and beverage (F&B) outlet.

His ice-cream parlour-cum-restaurant and bar will take up a whopping 6,000sqft on the eighth floor.

On weekends, he plans to keep his shop open till 3am or 4am.

The mall's new F&B tenants also include a restaurant brand from Shanxi, China, and a Japanese brand.

Rents at the mall, said Ms Leng, remain in the range of $20 to $70 per sq ft, though they may soften a little going forward, depending on the type of tenants and space taken.

Data from the Urban Redevelopment Authority shows that shop rents dipped 0.6 per cent islandwide in the third quarter, reversing growth of 5.2 per cent in the second quarter.

Retail sales volume fell 1.5 per cent year-on-year from June to August, due to cautious local spending and lower demand from tourists, the Monetary Authority of Singapore said in its latest macroeconomic review. It added that retailers could see slower business towards Christmas and into next year.

'Retail sales have slowed but not significantly yet. But there are forward concerns among tenants. It's a confidence issue,' said an industry source.

Knight Frank's deputy managing director, Mr Danny Yeo, said Orchard Central and Ion Orchard started marketing their space from mid- to late last year so they are doing relatively well given current market conditions.

'Those that started marketing recently and are about to ramp up marketing efforts will face more challenging times.'

Specialists' Centre, Meritus Mandarin Hotel and 313@Somerset are among those with new space available on Orchard.

'Landlords are still holding out. The real test will come after seasonal sales, after the Chinese New Year period. Tenants will try as much as possible to drum up sales now,' said another industry source.

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