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

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

Despite being a five-minute walk from Orchard MRT station, one of Singapore’s busiest train stations, the 42-year-old mall has suffered greatly. About a fifth of the units are vacant and available for sale or rent, and the occupants are more likely to be helpers than shops or restaurants associated with the main shopping district.

This same feeling of emptiness pervades the many old malls along Orchard Road, which extends from the beautiful Tanglin residential area near the Singapore Botanic Gardens to the Orchard MRT station.

Orchard Road, Singapore’s main shopping street, is 2.2 km (1.3 miles) long, but most of the activity takes place in the center and also in selected malls linked via underground walkways to the train station. Far East Shopping Center is not connected to Orchard MRT unlike some of its neighbourhoods.

This situation may soon change, however. Many old properties on the outskirts of Orchard Road are expected to be redeveloped in the coming years following numerous financial incentives from the Urban Redevelopment Authority (URA), Singapore’s land planning agency. But the investment required will still be significant, possibly running into the billions of dollars given Singapore’s high land and construction costs.

In the Tanglin section of Orchard Road, Hotel Properties Ltd (HPL), controlled by billionaire Ong Beng Seng, last year got approval to demolish three properties and build a 114,150 square meter mixed-use development with a hotel and residences. units in two tower buildings as well as retail and office space.

The two properties, the voco Orchard hotel and Forum The Shopping Mall, share about 180 meters of frontage on Orchard Road. The forum was worth just 948 million Singapore dollars ($705.9 million) last year.

However, the rebuilding has not yet started.

City Developments Ltd (CDL), one of Singapore’s largest listed developers, earlier this year bought the remaining owners of Delfi Orchard, a 40-year-old, 11-storey retail and residential building, in a deal that valued the property at 439. million Singapore dollars.

Analysts expect CDL to redevelop Delfi Orchard with the nearby Orchard Hotel and mall held by CDL Hospitality Trusts, a real estate investment trust managed by CDL.

“The Tanglin area is envisioned to be a mixed environment with a strong artistic and artisanal feel. Local residents and tourists can expect an even better offering of art, culture and lifestyle when the building owners redevelop and offer new uses to meet the evolving needs and preferences of visitors. ,” Singapore’s URA said in response to a query from CNBC.

From 2025, the URA will begin work on a series of improvements to the entire Orchard Road area, including a 6-kilometer “green link” linking the Singapore Botanic Gardens to Istana Park and Fort Canning Park located near the end of Orchard. way.

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 “experience spaces that go beyond traditional shops and F&B (food and beverage).”

He recalled when the Tanglin area was popular with shoppers, citing attractions such as the old Singapore Taste Food Centre, which housed many of Singapore’s most popular food stalls. Rasa Singapore closed in 1989 to make way for a new development.

Pacific Eagle, a real estate investor in Singapore privately held by the family of Indonesian billionaire Sukanto Tanoto, is redeveloping Tanglin Shopping Center, which it bought for 868 million Singapore dollars in 2022.

One of the challenges facing the URA and private sector developers looking to redevelop the upper part of Orchard Road is the ownership structure of many old commercial buildings. Instead of being a single holding company, the property is divided into smaller strata units held by different owners.

Putting the property up for sale requires the support of at least 80% of the strata owners who must also agree to a minimum asking price before the collective sale can be launched.

Other speed bumps include negotiations with the URA for concessions under the Strategic Development Incentive Scheme, which is aimed at getting landlords to redevelop old properties close together especially in the central business district and Orchard Road area.

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

Earlier this year, the collective sale of the Far East Shopping Center to an investment company linked to Chinese tycoon Du Shuanghua was called off after the buyer reportedly failed to get URA approval to increase the gross floor area of ​​the new development.

“If the URA wants to accelerate the redevelopment of Orchard Road, some programmatic tweaks will be needed,” said Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore.

Savills, which is the collective broker of Tanglin Shopping Center and Delfi Orchard, recently arranged the sale of Concorde Hotel, an old property on the other side of Orchard Road to HPL for S$821 million.

Tina Qiu, director of PLP Architecture, suggested building a sheltered sidewalk along Tanglin to protect pedestrians from the heat, humidity, and heavy rains that are so frequent in Singapore. With global warming, the situation at street level is only going to get worse.

“We can create more shelters on the pedestrian route, for example with animated canopies and retractable umbrellas that can be activated when the sun is high and retracted at night so that good light can flood the street,” he said.

Qiu, who is based in London but has projects in Singapore, noted that malls connected to Orchard MRT have different advantages than those in the Tanglin area because people can move from one place to another in a cool environment.

“People will use more comfortable spaces and in places like Singapore, they can be more easily reached in an organized interior environment,” he said.