High investor interest expected for PoMo

Market experts said Selegie road mall PoMo which was put for sale on Wednesday will see much interest from investors.

Experts said this is due to its busy, city-fringe location but added that a new tenant mix is needed to attract more shoppers.

PoMo underwent a S$20-million refurbishment to increase its retail space three years ago.

Formerly known as Paradiz Centre, the retail and office development has a net lettable area of 182,000 square feet.

Marketing agents Jones Lang LaSalle said PoMo holds great potential.

Its neighbours include the new School of the Arts and Singapore Management University.

Anthony Barr, National Director of Investments, Jones Lang LaSalle, said: “The asset itself is in a unique location. It’s close to both Dhoby Ghaut and Bras Basah Mrt stations, and in the surrounding area there is a significant amount of high end residential, as well as number of educational institutions.”

Observers said the new tenant mix should aim to serve the student population and the expatriate community.

The property is 10-storey high and has a retail area of 73,000 square feet.

Current tenants in the 99-year leasehold property include casual dining restaurants, a supermarket and a number of specialty schools.

Samuel Tan, who is the Course Manager of Retail Management at Temasek Polytechnic, said: “At this moment, the tenant mix of the mall itself is not attractive. It does not have this unique character that can pull in the crowds to the mall.

“There’s no big names and no big retailers. The positioning of the mall has to be more distinctive to differentiate themselves from Orchard road. If you look at it another way, it may be an extension of orchard road.

Based on the transactions in nearby properties, market watchers said PoMo should be worth S$250 million.

But analysts said that investors will be cautious because retail rents could be flat next year due to oversupply.

According to a third quarter retail real estate summary by DTZ, retail rents are at about $24 to $33 per square foot per month.

PoMo’s office segment may perform better due to a pick up in the office market. Overall office rents look set to rise by 15 to 20 per cent in 2011, said analysts.

PoMo is the latest mall in the city area to join the sale bandwagon.

Also riding on retail spending is Tanglin Shopping Centre with its second attempt at an enbloc, which has an estimated asking price of S$1.25 billion.

Source : Channel NewsAsia – 9 Dec 2010

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