Thursday, April 11, 2024, Far East Mall, Orchard Road, Singapore.
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Far East Mall along Singapore’s Orchard Road has seen better days.
Despite being just a five-minute walk from Orchard MRT Station, one of Singapore’s busiest MRT stations, the 42-year-old shopping mall faces very low footfall. About a fifth of the units are vacant, for sale or rented, and the residents are more likely to be maid agencies than the high-end shops or restaurants associated with prime shopping districts.
The same feeling of emptiness pervades many of the older malls in upper Orchard Road, which stretches from the posh Tanglin residential area near the Singapore Botanic Gardens to where the Orchard MRT station is.
Orchard Road is Singapore’s main shopping street, 2.2 kilometers (1.3 miles) long, but most of the activity takes place in the middle of this stretch and in selected shopping malls connected to MRT stations via underground walkways. Unlike several other neighbours, Far East Mall is not connected to the Orchard MRT station.
However, that may be about to change. Many older properties around Orchard Road are expected to be redeveloped in the coming years following a series of financial incentives launched by Singapore’s land planning agency, the Urban Redevelopment Authority (URA). However, due to the high cost of land and construction in Singapore, the investment required is still huge and may reach billions of dollars.
new investment
At Tanglin Section of Orchard Road, Hotel Properties Limited (HPL), Controlled by billionaire Ong Beng Sengwhich last year received approval to demolish three of its properties and build a A large-scale mixed-use development covering an area of ​​114,150 square meters The two towers house restaurants and residential units, as well as retail and office space.
Two of the properties, the voco Orchard Hotel and Forum The Shopping Mall, share about 180 meters of frontage along Orchard Road. Last year, the forum alone was worth S$948 million (US$705.9 million).
However, reconstruction work has not yet begun.
City Developments Ltd (CDL), one of Singapore’s largest listed developers, earlier this year bought out the remaining owners of Delfi Orchard, a 40-year-old 11-storey retail and residential building, in a deal that valued the property at Value is USD 439 million SGD.
Analysts expect CDL to rebuild Delfi Orchard Nearby is the Orchard Hotel and an adjacent shopping mall owned by CDL Hospitality Trusts, a real estate investment trust managed by CDL.
Arts, culture and lifestyle products
“The Tanglin area is envisioned as a mixed-use community with a rich arts and crafts feel. As owners redevelop and provide new uses to meet changing needs and preferences, locals and visitors can expect enhanced arts, culture and lifestyle method product tourist number,” Singapore’s Urban Redevelopment Authority said in response to CNBC’s inquiry.
Orchard Road area, Singapore, Monday, July 8, 2024. farm more than a century ago.
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Starting in 2025, the URA will begin a series of improvement works across the Orchard Road area, including a 6-kilometre “green link” linking the Singapore Botanic Gardens to the nearby Istana Park and Istana Park at the other end of Orchard Road. Fort Canning Park is connected to 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 beyond traditional retail and dining”.
He recalled how the Tanglin area was once popular with shoppers, citing attractions such as Old Raza Singapore Food Centre, which houses many of Singapore’s most popular hawker stalls. Rasa Singapura closed in 1989 to make way for new development.
Pacific Eagle, controlled by the family of Indonesian billionaire Sukanto Tanoto, is redeveloping the Tanglin Shopping Center, which it acquired for S$868 million in 2022.
challenge
One challenge facing the URA and private developers keen to redevelop Upper Orchard Road is the ownership structure of many old commercial buildings. Rather than being managed by a single holding company, the properties are divided into tiny strata units held by different owners.
The sale of such properties requires the support of at least 80% of strata owners They must also agree on a minimum asking price before launching a collective sale.
Another speed bump is negotiating with the URA to secure concessions from the latter’s Strategic Development Incentive Scheme, which aims to let property owners redevelop adjoining older properties mainly in the CBD and Orchard Road areas.
The URA said it was keen on new developments that would inject new lifestyle or retail offerings, fill gaps in planned walking networks, or improve access to public areas such as parks and waterways.
Earlier this year, a collective sale of Far East Mall to an investment company linked to China’s Hengdu Shuanghua was called off by the buyer. The URA has reportedly failed to approve an increase in the gross floor area of ​​new developments.
“If the URA wants to accelerate the pace of redevelopment along Orchard Road, it will need to make some adjustments to the project,” said Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore.
Savills brokered the collective sales of Tanglin Shopping Center and Delfi Orchard and more recently arranged the sale of the Concorde Hotel, located in The other end of Orchard Road leads to HPL, costing S$821 million.
beat the heat
PLP Architecture director Tina Qiu suggested building sheltered walkways along Tanglin Road to protect pedestrians from Singapore’s intense heat, humidity and frequent rain showers. With global warming, the condition of the streets will only worsen over time.
“We can build more shelters along the sidewalks, for example with animated canopies and retractable umbrellas that activate in the hot sun and retract at night to fill the streetscape with beautiful lights,” she said.
Chiu, who is based in London but has projects in Singapore, points out that malls connected to Orchard MRT station have distinct advantages over those in the Tanglin area as people can move from one place to another in a cool air-conditioned environment .
“In places like Singapore, people will use more comfortable spaces, which is easier to achieve in a regulated indoor environment,” she said.
