In Singapore’s iconic Orchard Road retail street, a new era is starting

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In Singapore’s iconic Orchard Road retail street, a new era is starting

The Far East Shopping Center on Orchard Road in Singapore, on Thursday, April 11, 2024.

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The Far East Shopping Center along Singapore’s Orchard Road has seen better days.

Despite being five minutes’ walk from the Orchard MRT station, one of Singapore’s busiest subway stations, the 42-year-old mall suffers from very poor footfall. Around one-fifth of the units are vacant and up for ***** or rent, and the occupants are more likely to be maid agencies rather than the high-end stores or restaurants associated with a prime shopping district.

This same feeling of emptiness pervades many of the older malls along the upper stretch of Orchard Road, which extends from the posh Tanglin residential area near the Singapore Botanic Gardens to where the Orchard MRT is located.

Orchard Road, Singapore’s main shopping street, is 2.2 km (1.3 miles) long but much of the activity takes place in the middle of the stretch as well as at selected malls linked via underground walkways to subway stations. Far East Shopping Center isn’t connected to Orchard MRT unlike several of its neighbors.

This situation could be about to change, however. Many of the older properties along Orchard Road’s periphery are expected to be redeveloped in the coming years following a slew of financial incentives from the Urban Redevelopment Authority (URA), Singapore’s land planning agency. But the investments required will still be significant, likely running into the billions of dollars due to the high cost of land and construction in Singapore.

New investments

At the Tanglin section of Orchard Road, Hotel Properties Ltd (HPL), controlled by billionaire Ong Beng Seng, last year obtained approval to knock down three of its properties and build a

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with a hotel and residential units across two tower buildings as well as retail and office space.

Two of the properties, the voco Orchard hotel and Forum The Shopping Mall, share some 180 meters of frontage along Orchard Road. The Forum alone was valued at 948 million Singapore dollars ($705.9 million) last year.

The redevelopment hasn’t started, however.

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-story retail and residential building, in a deal that valued the property at 439 million Singapore dollars.

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with the nearby Orchard Hotel and adjoining mall held by CDL Hospitality Trusts, a real estate investment trust which CDL manages.

Arts, cultural and lifestyle offerings

“The Tanglin area is envisioned to be a mixed-use neighborhood with a strong arts and artisanal flavor. Locals and tourists can look forward to enhanced arts, cultural and lifestyle offerings when building owners redevelop and offer new uses to cater to evolving needs and preferences of visitors,” Singapore’s URA said in a written response to queries from CNBC.

The Orchard Road area in Singapore, on Monday, July 8, 2024. The Orchard Road shopping strip is a global hub for tourism and high-end retail that’s boomed along with the nation’s rise, reshaping a swath of nutmeg plantations and pepper farms first cultivated over a century ago.

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Beginning 2025, URA will start work on a series of enhancements to the entire Orchard Road area, which include a 6-kilometer-long “green connection” linking the Singapore Botanic Gardens to Istana Park and Fort Canning Park located near the other end of Orchard Road.

Richard Goh, executive director of Pacific Eagle Real Estate, said the Tanglin section of Orchard Road can 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 Singapura Food Center, which housed many of Singapore’s most popular hawker stalls.

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Pacific Eagle, controlled by the family of Indonesian billionaire Sukanto Tanoto, is redeveloping Tanglin Shopping Center, which it acquired for 868 million Singapore dollars in 2022.

Challenges

One challenge facing URA and private sector developers keen to redevelop the upper stretch of Orchard Road is the ownership structure of many older commercial buildings. Instead of coming under a single holding company, these properties are divided into tiny strata units held by different owners.

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who must also agree on a minimum asking price before a collective ***** can be launched.

Another speed bump involves negotiating with URA for concessions under the latter’s Strategic Development Incentive Scheme, which is aimed at getting landlords to redevelop adjoining older properties primarily in the central business district and Orchard Road areas.

URA said it is keen on new developments that will inject new lifestyle or retail offerings, plug gaps in the planned pedestrian networks, or improve access to public areas like parks and waterways.

Earlier this year, the collective ***** of Far East Shopping Center to an investment firm linked to ******** tycoon Du Shuanghua was called off after the buyer

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“If URA wants to speed up the pace of redevelopment along Orchard Road, some tweaks to the programs will be required,” said Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore.

Savills, which brokered the collective ***** of Tanglin Shopping Center and Delfi Orchard, recently arranged the ***** of Concorde Hotel, an old property at the

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Beating the heat

Tina Qiu, director of PLP Architecture, suggested constructing sheltered walkways along the Tanglin stretch to protect pedestrians from Singapore’s relentless heat, humidity, and frequent rain showers. With global warming, conditions at street level will only worsen over time.

“We can create more shelter along pedestrian routes, for example with animated canopies and retractable umbrellas which can be activated during high sun and retracted during the night to let the beautiful lighting flood the streetscape,” she said.

Qiu, who is based in London but has projects in Singapore, noted that malls connected to Orchard MRT enjoy a distinct advantage over those in the Tanglin area since people can move from one place to another in a cool airconditioned environment.

“People will use spaces that are more comfortable and in places like Singapore, that can be more easily achieved in a regulated interior environment,” she said.

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