Isetan wants to put new tenants in Wisma Atria – will it work?

With new shopping malls coming up along Orchard and new retailers entering the scene, change is afoot at Singapore’s prime shopping belt.

Just recently, book retailer Kinokuniya moved to small premises within Ngee Ann City, allowing the landlord to carve out the space once occupied by the bookshop into smaller units – for various tenants.

At Wisma Atria next door, Japanese retailer Isetan is also changing tack. Isetan announced last week that it would stop running its own retail operations there and instead introduce new tenants in the space. It plans to provide facilities management at the premises.

Isetan holds about a 25 per cent stake in Wisma Atria, giving it flexibility over its own retail area. The department store retailer stressed that it is not pulling out from Orchard Road, as it still has the Isetan Scotts Store at Shaw House.

Analyst Mr Chris Koh, director of Chris International, said the move by Isetan to consolidate its retail business is a good one. “The one at Scotts does pull quite a bit of a crowd. So I guess it makes a lot of corporate and business sense to perhaps to move all their retail business to just one store, and then have Wisma managed in a different manner.”

However, even as it seeks new tenants for its space at Wisma, the key to attracting crowds lies in having the right tenant mix, and perhaps tapping on its connections to bring in the Japanese touch so as to distinguish the mall from its competition.

“Looking at rents in Orchard, a lot depends on the building, the shopping mall, the age of that mall and that will decide the amount of rent that you can collect,” said Mr Koh. “Rents in that area would be anything in the range of S$12 to S$15 per square foot. It depends on the concept that is created – if you have one that gets a lot of shoppers coming in, and you have a high shopping traffic, you probably will be able to collect higher rents.”

Orchard Road receives more than 7 million visitors each year, and is a popular shopping destination for tourists from across the region.

Source : Channel NewsAsia – 29 Dec 2014

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