Tag Archives: Orchard Road

Reinventing Orchard Road amid the subdued retail climate

ONE has to concede that Orchard Road is not the shopping belt it once was during its halcyon days. No longer do you see throngs lining the 2.2-kilometre boulevard, not even on weekends. Once regarded as the shopping and entertainment destination for Singaporeans and tourists alike, are Orchard Road’s glory days dwindling?

To better understand the wane of such a key shopping destination, it is worth looking at what has changed in the retail environment over the past few years.

Primarily, consumer purchasing patterns have changed. There is an increasing dependence on the convenience that e-commerce offers, and a rise in the popularity of suburban malls. The Great Singapore Sale, once a much lauded event, has lost its appeal due to thrifty shoppers seeking out favourable promotions online.

From a tourism point of view, there is now a higher focus on budget and culture travelling; shopping is no longer a focal point. Coupled with international brands having a higher global penetration (their brands are readily available back home and potentially cheaper), Singapore’s appeal as a key tourism destination for shopping seems to have waned.

 

 

However, all is not lost. Orchard Road still possesses many factors which makes it desirable. The strip is lined by iconic shopping malls, hotels and medical centres. These malls and hotels are home to a spectrum of fashion brands – from high street to luxury, and signature homegrown and international restaurants.

While it faces keen competition from Marina Bay Sands, Orchard Road still has the magnetic appeal for new market entrants to set up shop and generate brand awareness in South-east Asia. It is also worth remembering that it remains the longest retail strip in Singapore, which is a point of differentiation in terms of consumer experience.

There have been several initiatives introduced in an attempt to reinvent Orchard Road. These include the annual Fashion Steps Out, the monthly Pedestrian Night, and Rev-Up@Orchard to coincide with the Formula 1 Grand Prix, to name a few. Developers have also introduced redevelopment and asset enhancement works at buildings such as 268 Orchard Road and Centrepoint, as a means of reinventing the strip.

A more collaborative approach by the various stakeholders on Orchard Road is perhaps needed to regain its lustre.

Tourist destination

The fastest way for Orchard Road to raise its game as a tourist destination may be to consider increasing tourist-friendly initiatives that cater to the needs of not only leisure shoppers, but also transient ones.

Very often, tourists have a few hours to spare between their hotel check-out and flight. If facilities such as centralised baggage storage and direct buses to the airport are made available, Orchard Road could be the choice destination to fill up the last day of their travel.

In addition, mall landlords can also offer centralised concierge services for shoppers to have a shopping-bag-free experience, with their purchases collected on the way to the airport, prior to boarding the buses. From the local shoppers’ point of view, the concierge services can also include home delivery services.

Product differentiation

We need to remind ourselves that local shoppers remain the consistent pool of consumers. A rebranding and repositioning exercise is necessary for Orchard Road to appeal to local shoppers again.

In the current retail climate, the recipe for success for malls tends to be product differentiation and unique shopper experience. Mall landlords can leverage the pool of budding local designers by integrating them seamlessly with the existing premium brands in the malls. Instead of constantly looking outwards for new brands, landlords can also now look within and play a part in nurturing these designers, who can potentially be the next wave of household names.

Leveraging the wide tree-lined pedestrian boulevard, landlords can consider introducing more pop-up stores outdoors instead of containing them within the mall, with the aim of merely filling up empty spaces. These store formats will help create awareness for the brands and allow shoppers to be more familiar with them. This can also be a good way to attract overseas brands that want to test the level of brand acceptance in the Singapore market, without making a long-term commitment.

Place-making

Adapting to the evolving market sentiments and the needs of consumers is critical to the success of these shopping belts. Increasingly, there is a demand for a differentiated retail experience. It is now a necessity for shopping locations to have an overarching place-making strategy which includes activities planning and community engagement. This takes into account events and spaces which cater to the target demographic of both locals and tourists, encompassing both daytime and night-time activities.

Through active place-making, shoppers can expect events to be brought into the strip to create a more holistic shopping and recreational experience. For instance, on days when major sporting events are held, outdoor screenings of these happenings can take place in the open areas along Orchard Road.

In the past, marketing events such as Coca-Cola Happiness Creator Machine and the MediaCorp Subaru Car Challenge have successfully created some hype. Apart from centralised efforts by the Orchard Road Business Association (ORBA), more can be done by involving existing retailers operating along Orchard Road. For example, music festivals such as H&M Loves Music Festival can be held, combining people’s love for music with fashion.

Integrating offline and online retailing

While retailers on Orchard Road have been pampered with guaranteed footfall in the past decade, it is now time for them to step out of their comfort zones and be more proactive. There is always a limit to how far brick-and-mortar retailers can engage in price wars, and fighting head-on with online retailers by aggressively cutting prices is definitely detrimental to their business in the long run. What these retailers should do is work around the barrier that e-commerce has – the unique social interaction between the brand and the consumer.

While brands have increasingly gone online, we have also seen online retailers going in the opposite direction by setting up new-format physical retail stores. Such stores exist often not with the aim of producing sales numbers, but to act as a platform to bridge the offline and online retail experience.

For example, Zalora has had a pop-up tour in some malls to showcase its products to offline shoppers. Stylenanda, which has gained popularity over the years as one of the best Korean fashion websites together with its sister brand 3 Concept Eyes, has started setting up stores in the high streets of the main retail areas in Korea, Hong Kong, China and Thailand.

In the years to come, experiential retail will be the next wave of change we expect for the retail environment. Lines between offline and online retail will be blurred, and brick-and-mortar shops will double up as an avenue where shoppers can touch, feel and experiment with the latest products – sometimes even before the products are launched officially.

We will see technology increasingly integrated into traditional retail to offer shoppers a unique and interactive shopping experience. Some examples include augmented reality shopping catalogues and product descriptions, 3D scanning of body sizes, and virtual changing rooms. Being Singapore’s key shopping belt, Orchard Road landlords and retailers can spearhead this trend, and at the same time rebrand the whole shopping experience of the district.

Prime retail rents on Orchard Road fall for sixth straight quarter: CBRE

AVERAGE prime retail rents on Orchard Road fell for the sixth consecutive quarter in the second quarter of this year, CBRE Research said on Thursday.

Prime Orchard Road rents stood at S$32.50 per square foot per month (psf/month), on average, in the second quarter, down 1.1 per cent from the first quarter of 2016.

The prime suburban retail rents fell less sharply, with the average prime rent in that segment weakening by 0.7 per cent to S$29.45 psf/month from the first quarter of 2016. Prime suburban rents only began to fall in the last quarter of 2015, CBRE noted.

“The retail sector is still undergoing restructuring and is currently an occupiers’ market,” said Desmond Sim, head of research, Singapore & South East Asia, CBRE, in a media statement.

Still, given intense competition within the market, location, visibility, and high footfall have become even more important factors for brands, with firms holding off expansion and market entry, as prime space in good locations is scarce.

“With no foreseeable new supply in Orchard Road and Marina Centre in the next few years at least until 2019, this should provide some support for prime rents in Orchard Road for the next half of the year,” CBRE said.

‘Special precinct’ among ideas to help Orchard Road raise its game

A more differentiated and customised shopping experience, as well as greater prominence for Singaporean craft and design could be in the works to strengthen Orchard Road’s appeal.

A proposal for a “special precinct” called Upper Orchard, comprising the area stretching from Tanglin Road to Scotts Road, has also been put forward by City Developments (CDL).

The district will have a “unique personality that sets it apart from the other malls on the other side of Orchard Road”, said a spokesman from Hong Leong Group, which owns CDL. “It is characterised by boutique malls with a unique tenant mix … When the Orchard Boulevard Station is completed, the accessibility and attraction of this precinct will be greatly enhanced,” he added, in response to TODAY’s queries earlier this week.

Along with several hotels such as The St Regis Singapore and Orchard Hotel, malls that are along the stretch include Palais Renaissance, Hilton Shopping Gallery, Forum Shopping Mall and Tanglin Shopping Centre. CDL and CDL Hospitality Trusts (CDLHT) — which are both subisidaries of Hong Leong — owns and manages several properties along the stretch.

Responding to TODAY’s queries, the Singapore Tourism Board (STB) said that following the success of Keepers, a two-year project to showcase Singapore craft and design, it is exploring other ways to profile local designers. Keepers, which comprised pop-up stores in Orchard Road and Changi Airport, ended its run in January.

STB director of lifestyle precincts development Serene Tan noted that some of the designers’ collections were picked up by department stores, including TANGS and Robinsons. “Today, TANGS has a dedicated section for Singaporean designers, and Keepers is still being run under Carolyn Kan at the National Design Centre,” she said.

A survey commissioned by STB found that almost half of the shoppers who visited Keepers were tourists. Among other findings, almost 8 in 10 of the visitors said they were interested to see a similar showcase that is set up permanently in Singapore.

Apart from the proliferation of local and heritage brands, Ms Tan cited consumers’ increasing demand for experiential retail as a key emerging trend in Singapore’s retail scene.

“More mall owners and retailers are providing differentiated and personalised shopping experiences to attract consumers,” she said.

For example, last July, TANGS department store ran a pop-up barber shop in its Orchard Road outlet. Shoppers could also get a free shoe shine or get their sneakers customised by homegrown design label SBTG.

In March, ION Orchard hosted a series of entertainment events and art shows such as aerial circus acts and a balloon installation, Ms Tan said.

Source : Today – 21 May 2016

Orchard Road faces a time of reckoning after decades at the top

Once a famed shopping haven for Singaporeans and tourists alike, Orchard Road is at risk of going out of fashion, never mind the opulence and grandeur of new and refurbished malls lining the 2.2km boulevard.

Even on weekends, the crowds have visibly thinned and vacancy rates have risen — at some of the older malls, more than half the shops on entire floors are empty.

Faced with the combined onslaught of online shopping and the mushrooming of suburban malls in housing estates, it is little wonder that Orchard Road is feeling the heat. But crucially, say shoppers, retailers and experts, it has failed to adapt to changing consumer trends and respond to competition.

For a place marketed for decades as a tourist hotspot, shopping centres there have no baggage storage facilities, they point out for example. Neither is there an airport express bus service.

Singaporeans are also increasingly finding fewer reasons to make their way to Orchard Road. Apart from being able to get everything they need online or from the nearest suburban mall — if they fancy a spot of traditional shopping, it is a hassle finding parking at Orchard Road for those who drive and the malls there are, by and large, not family-friendly.

Youths also say that there are “cooler” places for them to hang out — such as Bugis, where the retail mix is targeted at them.

Ms Sophia Chan, who is in her 30s, finally managed to persuade her husband to go shopping with her and their two toddlers at Orchard Road one recent weekend. But that trip has made the family — who live in Punggol — swear off the place for good. “We will stay out of Orchard Road unless it is a very specific agenda we have in mind. It is unnecessary stress, and with kids, it is a no-no,” said Ms Chan, whose sons are aged four and two. “We would rather have a good family time elsewhere. For things we need to buy, most of them are available at the nearby malls. If not, it is best to go online.”

To get her dose of retail therapy, Ms Chan said she frequents Waterway Point and Vivocity, where her kids can spend time at the children’s play areas. Parking at these places is cheaper, too, she pointed out.

Mr Ian Lee, 38, lamented that, over the years, Orchard Road has lost its connection with Singaporeans by going more upmarket. Noting that prices at the shopping belt are generally higher, Mr Lee, who was in the vicinity for work last week, said: “We don’t come here much as it is no more a place for (the masses).”

Even for tourists or foreigners, the appeal of shopping at Orchard Road is diminishing, no thanks in part to the strong Singapore dollar. Australian Marc Adams, who is in his late 40s, said: “I am not very fond of shopping, but my wife tells me that some brands are more expensive here. We don’t necessarily need to shop here as we travel a lot.”

Nevertheless, Mr Sun Xinchun, a China-born student who is studying in a polytechnic here, said he had to take his parents to Orchard Road when they came to Singapore to visit him recently. “Orchard Road is famous in China,” he said. However, he noted that there was not much difference in terms of the variety of brands and the prices in Orchard Road compared with what his parents could buy back home. For him, he prefers to spend time with friends in Bugis, where it is “more affordable to eat, and shop for our kind of stuff”.

In a TODAY straw poll of 100 people aged 18 and above in the Central Business District, 17 respondents said they go to Orchard Road at least once a week. In comparison, 64 said they go to suburban malls at least once a week, while 19 shop online once a week or more. Among other findings, almost half of the respondents said they go to the shopping belt only about once every three months, or hardly ever.

VACANCY RATE AT A FIVE-YEAR HIGH

Brick-and-mortar retailers across the island have been buffeted by the economic slowdown, competition from e-commerce, the manpower crunch, rising business costs and lacklustre tourist spending, among other things. But those at Orchard Road appear to be harder hit: Data from the Urban Redevelopment Authority showed that the vacancy rate in malls along Orchard Road hit a five-year high in the first quarter at 8.8 per cent. This is higher than the average vacancy rate in malls islandwide (7.7 per cent).

Ms Christine Li, director of research at Cushman & Wakefield in Singapore, said the vacancy rate in Orchard Road will continue to climb, probably hitting 10 per cent by the fourth quarter.

A walk around Orchard Road tells the story: Several malls are quiet with few shoppers in sight. At the older strata-titled malls such as Far East Plaza, the shutters are down for many units on its ground floor.

Newer shopping centres are not spared either, with vacant shops at Mandarin Gallery and 268 Orchard, to name just two.

Several malls told TODAY that they are focused on creating niche shopping and dining experiences. A Hong Leong Group spokesman cited Claymore Connect, which is located next to Orchard Hotel and positioned as a “family-oriented mall … to cater to the growing captive residential population in the nearby precincts”. Palais Renaissance, which is owned and managed by Hong Leong Group subsidiary City Developments, also offers an “intimate retail experience to a niche clientele with sophisticated and discerning tastes”, the spokesman said.

Frasers Centrepoint Malls, which manages The Centrepoint, said it is currently looking for family-friendly tenants. Its spokesperson said: “We are taking the necessary time to assess tenants’ suitability. While many retailers are likely to remain cautious and take stock of their business operations over the next 12 months, we want to stay on top of the game and renew the experiences that we provide.”

Individual shopowners said their businesses have seen better days. “We are losing money hand over fist, and not sure what we could do next,” said the manager of a garment store in Orchard Gateway who gave his name only as Mr Lim.

Mr Prem Khaitani, who owns Christian Armani Ladies & Gents Tailors at Far East Plaza, said: “It has never been so bad … (In the past), retailers made a bee-line to get a shop here. Today, many are winding up … units are increasingly falling vacant. I am struggling to keep the shop open.”

He added: “My two employees have nothing to do all day. However, I am not in a position to terminate their jobs as their families will then be in deep trouble. They have been with me for the past 15 to 20 years.”

As a sign of lean times, he pointed out that the rental for his 330 sqft unit had fallen from S$20,000 a month in the 1980s — Far East Plaza’s halcyon days, when Metro was its anchor tenant — to S$7,500 currently.

Mr Paul Lim, who works at Aik Seng Photo at Lucky Plaza, said: “We used to sell four to five cameras a day; now, we are unable to sell even one in a week … Tourists find it expensive to shop in Singapore as our dollar remains strong.”

In contrast with the falling businesses of some malls along Orchard Road, suburban shopping centres are gaining popularity, buoyed by factors such as proximity to population catchments and easy accessibility via public transport.

Increasingly, upscale brands have been uprooting themselves from prime shopping districts and moving closer to their customers in the suburban markets, said Savills Singapore research head Alan Cheong.

In December, for instance, luxury watch retailer The Hour Glass opened its first outlet at Parkway Parade in Marine Parade — the first suburban store to carry Rolex watches. In the same month, luxury brand Chanel opened its beauty and fragrance store at Jem in Jurong East.

Brands such as H&M, Uniqlo, Onitsuka Tiger, British India, and Juicy Couture have also set up shop in malls in housing estates.

WHOLESALE CHANGES NEEDED

The busiest shopping streets around the world, such as Oxford Street in London or Fifth Avenue in New York, are not just about shops. They are also a “work-and-play” district where people enjoy hanging out, apart from eating and shopping.

As such, turning Orchard Road into a lifestyle district — where both locals and tourists will aspire to go to for shopping and other activities — could, perhaps, be a game changer, said Ms Anthea To, senior associate director, research & advisory, at Colliers International.

“With Orchard Road’s cultural heritage, appealing residential areas as well as offices, more can surely be done on Orchard Road to make it even livelier. Having more public spaces, weekend farmers’ markets, hip cafes and bars, as well as thematic kiosks on the side streets — if regulation relaxes — would boost Orchard Road’s vibrancy,” she added.

Also, issues such as traffic and connectivity will need to be looked at as shops alone are not enough to maintain or boost footfalls. Currently, the multi-lane busy traffic makes the street unwelcoming and intimidating for pedestrians at street level.

Turning some parts of Orchard Road into pedestrians-only areas could be a way forward to better connect both sides of the shopping belt, Ms To said.

Mr Desmond Sim, head of CBRE Research in Singapore and South-east Asia, suggested making public transport free along Orchard Road, as it is in Melbourne’s city centre.

“It is hard to expect shoppers to cover the entire shopping area at Orchard Road by foot. More so, given frequent rains and torrid weather in Singapore. Moreover, shoppers tend to be lazy, and seek experience and enjoyment while shopping,” Mr Sim said.

He noted that pushing more for underground linkages may result in too heavy a financial commitment for landlords in the area to shoulder amid tough times.

However, an airport express from the Orchard Road area to Changi Airport, along with a luggage drop-off point in the vicinity, will go a long way towards easing the shopping experience for tourists in Singapore’s premier shopping destination, Mr Sim noted, pointing to the IFC experience in Hong Kong.

The IFC mall, located in the city’s Central District, sits above a transport hub that includes the Airport Express station.

CHALLENGING RETAIL SCENE

In response to various suggestions on how to revitalise Orchard Road, Ms Serene Tan, director of lifestyle precincts development, Singapore Tourism Board (STB), told TODAY: “We appreciate and will take these suggestions into consideration, along with the insights that we have gathered from our Envisioning Orchard Road exercise.”

In March last year, the STB announced that it had embarked on an Envisioning Orchard Road exercise, which was expected to wrap up by the end of the year.

Ms Tan said the STB will be taking the insights from the “fruitful” exercise into consideration in its plan to enhance the shopping belt. More details will be shared when they are ready, she said.

Acknowledging that the retail landscape “is getting increasingly competitive, and consumers are becoming more discerning”, Ms Tan noted that the STB works closely with the Orchard Road Business Association and other stakeholders to “constantly rejuvenate the precinct with new events, concepts and programming”. For instance, Christmas on A Great Street, the annual Christmas Light-Up on Orchard Road, is a perennial favourite among visitors and Singaporeans. The event attracts more than one million tourists and four million locals each year.

Apart from the Christmas light-up, there are also the annual fashion extravaganza Fashion Steps Out Orchard Road, and the F1-themed Rev Up @ Orchard Road — all striving to inject buzz into the precinct, Ms Tan said.

She reiterated that Orchard Road “remains Singapore’s most iconic shopping destination, and continues to be the location of choice for international brands seeking to establish their presence in Singapore and the South-east Asian region”.

She said: “It is already home to many flagship stores of international brands such as Gucci, Crate and Barrel, and Sephora. By the end of this year, there will be even more. For instance, brands such as Uniqlo, Victoria’s Secret and Hermes will be establishing their first South-East Asian flagship stores on Orchard Road. Apple has also announced plans to set up its first brick-and-mortar store in the precinct within the year.”

Several analysts said the upcoming Apple store at Knightsbridge mall along Orchard Road could potentially revive the shopping district. After all, remarkably designed Apple stores in several places around the world are known for their look and feel.

“Apple stores typically have this ability to enliven shoppers’ spirit. People are waiting for it with bated breath. It will likely boost footfalls at Orchard Road,” said Mr Sim.

Based on official annual tourism statistics from 2005 to 2014, Orchard Road is the most-visited free-access attraction in Singapore among visitors, the STB said.

Nevertheless, the STB’s preliminary estimates showed that Singapore’s tourism receipts fell last year for the first time in six years by 6.8 per cent to S$22 billion.

While visitor arrival numbers to Singapore surpassed targets to reach 15.2 million, tourism receipts fell short of the official forecast of between S$23.5 billion and S$24 billion.

The Government has embarked on efforts to reverse the tourism slump, including a S$20 million Golden Jubilee marketing campaign last year. These appear to be bearing fruit, with visitor arrivals to the Republic up in the first two months of this year from a year ago.

Last month, Minister for Trade and Industry (Industry) S Iswaran said that while economic uncertainty means periodic fluctuations for the tourism sector, there is also the “promise of significant long-term opportunities”.

MULTI-MILLION MAKEOVER

Back in October 2007, the STB announced a S$40 million rejuvenation plan to create a more vibrant streetscape and enhance the lifestyle experience on Orchard Road.

The plan included enhanced road and pedestrian mall lighting to create night-time landscapes, new coordinated street furniture beside a lush, green tree-lined boulevard, creative event spaces and a more integrated and engaging pedestrian mall.

Apart from new developments such as ION Orchard, 313@Somerset and Orchard Central, older buildings such as Hotel Phoenix and Specialists’ Shopping Centre were also slated for redevelopment.

However, Cushman & Wakefield said in its 2016 Asia Pacific Capital Insights report published last month that the rejuvenation plan “turned out to be a bit of an overkill”.

The report noted that when the global financial crisis hit in 2008, consumers tightened their belts, and retailers were badly hit. At the same time, prime retail supply hit a record high with the completion of ION Orchard, 313@Somerset and Orchard Central in 2009.

Orchard prime rents contracted from S$45.40 per square foot per month (psf/mo) at the end of 2008 to S$36.50psf/mo in the two years through 2010, correcting by almost 20 per cent.

According to Cushman & Wakefield research director Li, rents have since stablised. However, they still remained 18 per cent below the peak in the first quarter of 2016.

While Orchard Road is trying to recapture its heyday, suburban malls have enjoyed the benefits of decentralisation and urban renewal in recent years. Rents and occupancies in these malls have continued to outperform that of Orchard Road’s since the financial crisis, said Ms Li.

Orchard Road can expect continued competition for the shopping dollars from other parts of Singapore, with about 2.2 million sqft of retail spaces entering the suburban market over the next five years.

According to Cushman & Wakefield, almost 30 per cent of that new retail space will come from new developments at Changi Airport, in the form of Terminal 4 and Jewel Changi Airport, a retail and lifestyle complex within the airport that is expected to be ready by 2018.

Meanwhile, retail analysts said Orchard Road has to turn itself around by then, or risk losing its status as a Singapore icon to the new jewel in town.

Whatever plans the authorities have up their sleeves to revive the iconic shopping belt, they have to do it quick and get it right — in order to keep its special place in Singaporeans’ hearts, which is fast diminishing.

Mr Vincent Tan, 52, a taxi driver who lives in Sengkang, said: “It’s a waste of time and loss of energy to drive down to crowded Orchard Road. Gone are the days when outings at Orchard Road sounded like a plan. We now shop online and get stuff delivered home. Our kids enjoy browsing online stores.”

Ms Belinda Goh, a stay-at-home mum from Bedok, added: “Shopping online is much cheaper and less stressful.”

Source : Today – 21 May 2016

Orchard Road malls seek new ways to draw the crowds

As Singapore retailers face pressure from the slowing economy, Orchard Road malls are looking for new ways to draw the crowds.

Besides renovating the mall and changing the tenant mix, landlords are also throwing in free performances in a bid to attract the crowds.

For example, over the weekend, shoppers at ION Orchard witnessed a series of aerial circus acts. The performances marked the completion of ION Orchard’s recent revamp, which saw a refreshed facade and new tenants such as Tiffany & Co and French-Italian luxury lifestyle brand Moncler.

Orchard Turn Developments, which manages ION Orchard, said it is important to enhance the shopping experience.

Said Mr Chris Chong, chief executive of Orchard Turn Developments: “Increasingly, retail is not just about shopping but also about entertainment, bringing new novel experiences. Last year, we did a butterfly dome featuring live butterflies from the Crysalis. This year, we will bring an exciting new experience with the aerial sphere. We hope shoppers will enjoy this new experience and as a result also enjoy shopping with us.”

Orchard Road retailers have been hit by a slowing local economy and weak visitor arrivals in the past two years. Analysts estimate that Orchard Road rents fell last year and could drop by another 3-5 per cent this year.

Besides ION Orchard, other malls being refurbished include Centrepoint and Wisma Atria.

IMPROVE OVERALL EXPERIENCE: JLL

Property consultancy JLL said that not all Orchard Road malls require a complete physical overhaul. But landlords and retailers must work together to improve the overall retail experience, amid competition from online retailers and suburban malls.

Ms Regina Lim, national director of advisory and research at JLL, commented: “I don’t think it has to be a total refreshment or refurbishment; it’s about being more aware of giving shopping a reason to come to your shop or to your mall.

“So even if the mall isn’t getting a facelift, I think retailers and landlords need to think about giving some reason for families to come down and visit rather than just buy it online.

“In this day and age where there is quite a bit of supply along Orchard Road, you really need to proactively think about how you want to make your mall a little bit different from the rest and engage the public to come down to the mall to shop. Because people really want to integrate shopping online and offline and going to the mall has to come with some kind of experiential performance and events,” Ms Lim added.

Source : Channel NewsAsia – 14 Mar 2016

Orchard Road retail rents scrape four-year low

When Singaporean Hidayu Mustaafa craves for retail therapy, she walks to a mall five minutes from her home in the eastern suburb of Tampines instead of bussing down to Orchard Road – the island-state’s shopping Mecca.

That is bad news for Orchard Road’s glitzy malls, which showcase brands such as Inditex’s Zara and H&M, as well as luxury names like Chanel and Prada. Increased competition from suburban malls and online retailers, combined with falling tourist numbers from China and Indonesia, have hurt spending and pushed retail rents to their lowest since 2011.

Average monthly gross rents of prime retail space on Orchard Road slipped 1 per cent in the second quarter from the previous three months to S$37.79 per square foot, according to Cushman and Wakefield.

“It is more imperative than ever that shopping malls need to innovate and refresh shopping experiences to stay ahead of the competition,” said Ms Christine Li, the real estate consultant’s research head in Singapore, adding that less established malls with little differentiation will underperform.

At least one mall has recently decided to revive its offerings. Wheelock Properties’ Scotts Square, where occupancy rates have been on a downtrend, said it would bring in names like fashion label Alexander McQueen and Belgian fine leather goods maker Delvaux.

Cushman and Wakefield’s Li expects Orchard retail rentals to fall 2.1 per cent by end-2015 from the end of June, while suburban mall rentals could prove more resilient and remain flat. “It’s a very challenging retail environment still for Orchard Road, but the bright spot is that there is no (new) supply in market (until 2018),” she said.

Source : Channel NewsAsia – 13 Jul 2015

‘Retail-tainment’ key to Orchard Road’s revival: Experts

The Centrepoint along Orchard Road will soon go through another facelift to make itself more attractive to shoppers and tourists. But in an increasingly competitive landscape, malls along Orchard Road must also offer other leisure activities and facilities to complement the retail experience, according to property experts.

Orchard Road receives more than seven million visitors each year, but it is facing competition from new attractions and hotels in Singapore outside the shopping belt.

Second Minister for Trade and Industry S Iswaran announced recently that the Government is gathering feedback on how to rejuvenate the 2.2-kilometre stretch in order for it to remain a competitive retail destination for tourists.

Property consultants said activities and services can help improve the shopping experience. Mr Desmond Sim, head of research for Southeast Asia and Singapore at CBRE, said: “The retail environment is definitely more competitive and … retail malls are no longer pure plays of transactions. You have to do other activities.

“Our guys have coined the term ‘retail-tainment’ – where you go into a retail place and you do a lot of things. You can go for a spa, kids’ lessons … as well as things like parks and museums so as to engage the whole age spectrum. Activity is important, and through such activity, hopefully they will start spending as well.”

Other property consultants also mentioned social media as another way for mall owners and retailers to engage shoppers amid rising competition from digital retailers.

“It is important not only for the shopper’s experience but it also helps mall owners and retailers understand shifting in profiles of shoppers,” said Ms Lee Siew Ling, director of retail at Jones Lang LaSalle Property Consultants.

“By making use of social media, it will help them to understand the changing demand and cater to that. This is especially for high-street brands, where a lot of brands are accessible via shops and online. There are less reasons now for shoppers to go to brick-and-mortar stores to purchase a product.”

Source : Channel NewsAsia – 2 Apr 2015

Can revamped Shaw Centre bring buzz back to Scotts Road?

Twenty months and S$80 million later, Shaw Centre is all decked out in time to welcome shoppers this festive season. The 42-year-old mall was given a facelift to improve its appeal and pull in a younger crowd, and property consultancy Chestertons say the makeover could also give Scotts Road a much-needed lift.

The new Shaw Centre now has a wider sidewalk and a glass facade. It also has a new Urban Plaza, built over the former terrace public concourse, where red-carpet events can be held.

Inside the mall, the look and feel has also been modernised. The new Shaw Centre has over 11,000 square metres of retail space, and it has achieved leasing commitment for 80 per cent of the space. Polo Ralph Lauren, Nike and SK II Boutique Spa are among the retailers who have set up their flagship stores at the mall.

In order to drive up shopper traffic, more space has been dedicated to F&B. There is a new food court, as well as more upmarket dining options such as the outlets operated by the Les Amis Group. F&B now accounts for 35 per cent of the total space in the mall, compared to 15 per cent before the revamp.

Mr Mark Shaw, executive vice-president of operations at Shaw Organisation, said: “It is really important to have a lot of F&B, particularly because Singaporeans are very food-obsessed, and you know, you cannot eat online. So a good way to combat e-commerce is to have a lot of restaurants and services which require the presence of the consumer.”

Shaw Organisation said three floors were demolished to realign the building with the adjacent Shaw House, to provide a more seamless shopping experience.

Shaw Theatres Lido, which houses Singapore’s largest Digital IMAX Theatre, is one of the key competitive advantages of the mall, said Mr Shaw.

“The renovation has allowed us to bring our rentals more up to current Orchard Road market rates, that has definitely helped a lot,” said Mr Shaw. “In terms of footfall, I think the cinema is really the main driver, as well as Isetan and the unique F&B offerings.”

JAZZING UP SCOTTS ROAD

According to real estate consultancy Colliers International, the average monthly gross rent for prime retail space in Orchard Road was S$36.25 per square foot in Q3 2014.

Analysts said the renovation will go some way to help Shaw Centre stay competitive in an ever-changing Orchard Road retail scene.

Mr Donald Han, managing director of Chestertons, said: “In terms of positioning, they have got it right. They have been there, they are at one of the busiest intersections. It is now about harnessing the traffic into the building, keeping them there to spend.’”

Mr Han added that in the last 10 years or so, the ‘heartbeat’ of the retail district has shifted from the intersection of Orchard Road and Scotts Road to the Bideford Road and Orchard Road junction further down the shopping strip.

However, upcoming developments could jazz things up in the Scotts Road area. “We have now seen the completion of Shaw Centre, Shaw House. Another mall which was the former Orchard Hotel shopping annex, now called Claymore Link, is undergoing a S$30 million retrofitting uplift as well – that should transform the streetscape between Tanglin right up to the Orchard Road-Patterson Road area,” Mr Han said.

Source : Channel NewsAsia – 19 Nov 2014

Orchard Road shopping malls face challenges in en bloc sale

Tanglin Shopping Centre is trying for an en bloc sale for the second time.

It failed to find a buyer on its first attempt last year at a reserve price of S$1.25 billion.

In fact, there has never been a successful en bloc sale in the Orchard Road shopping belt.

Teresa Wong purchased a freehold shop spanning 330 square feet at Far East Plaza 25 years ago.

For the beauty therapist, the need to control costs was crucial.

She said: “The landlord might ask us to leave after two or three years. So my best bid was to buy the shop and stay here permanently. When we shift, we have to renovate. And renovation cost money.”

The shop space cost S$0.5 million back then and its current value is triple that or at least S$1.6 million.

Should an en bloc sale take place, Madam Wong would only sell at double the current value or S$3 million.

Satisfying the expectations of owners with shops of varying degrees of human traffic is a major obstacle to putting a strata-titled mall on the market.

Jones Lang LaSalle’s head of investments, residential, Karamjit Singh, said: “In Orchard Road, you will always have a situation where some trades, despite the age, may be doing very good business. Whenever you have that taking place, the owners are always very reluctant to sell because there aren’t many comparable replacement properties for them to channel their investments towards.”

This could also be the challenge to getting 80 percent of the 173 owners at Tanglin Shopping Centre to approve an en bloc sale. But, it may be second time lucky for this 40-year-old mall.

Christina Sim, director for investment and capital markets at Cushman & Wakefield, said: “They have a good chance of succeeding because I don’t think there are many big ticket commercial properties right now. And with QE3 coming in, there would be some hot money coming in too. What would likely happen is that a foreign investor would team up with a local developer to do this.”

Analysts say an en bloc sale attempt could be made easier should URA’s masterplan, reviewed once every five years, indicate a new building could yield more gross floor area than the existing one.

Another push factor to convincing numerous strata titled owners in a building to agree is to an en bloc sale is the change of land use from say shops to a hotel.

Source : Channel NewsAsia – 23 Oct 2012

Orchard Road: 25th most expensive retail street globally

Singapore’s famed shopping street, Orchard Road, has been ranked 25th most expensive in the world this year.

With rents of retail space averaging at S$462.43 per sq ft a year, this is a notch up from last year against 129 cities in a study conducted by Colliers International.

New York’s Fifth Avenue and Hong Kong’s Queen’s Road Central and Canton Road were the world’s top three most expensive shopping streets, commanding the highest rentals.

Published on an annual basis, the 2012 global survey tracked annual retail rents of the world’s prime retail corridors – from the first quarter of 2011 to the first quarter of 2012 – across 129 cities in North America, Europe, Middle East and Africa (EMEA), Asia Pacific and Latin America.

The improvement in ranking came despite prime rents in Orchard Road easing by 0.5 per cent on-year to S$459.60 per sq ft per year as of the first quarter of 2012.

On a quarter-on-quarter basis, prime rents of retail space remained unchanged in the first quarter of 2012 at S$38.30 per sq ft per month, but eased towards the second quarter by 1.9 per cent to S$37.58.

Colliers International attributed Singapore’s global rank ascent to the strengthening of the Singapore currency against the US dollar.

Charles Ng, director of Retail Services of Colliers International, added: “Additionally, tenants are observed to be more selective in the space they take up – taking into consideration the volume of pedestrian flow and position of shops in malls.

“Landlords are looking to create and maintain the retail identity and concept of their malls by stringently controlling the tenant mix. Consequently, the market experienced inertia on further rent increases.”

With growing competition for tenants and a challenging operating environment, the sector is likely to see flattening growth rental rates for the rest of the year.

But with sustained retail sales growth and more new retail brands entering Singapore, Colliers pointed out that any downward rental movement will be marginal at 3 to 5 per cent for the whole of 2012.

Source : Channel NewsAsia – 11 Jul 2012