Orchard Road gears up for 2011

Analysts say malls across Singapore will be stepping up their game next year, now that retail spending looks set to increase due to robust growth and higher tourism arrivals.

More landmark developments will be open from next year, on the stretch of the iconic Orchard Road.

Orchard Road Business Association executive director Steven Goh said: “…Orchard Road is a street where it continues to reinvent itself.

“And you will see another opening of a new mall, Scotts Square, in the third quarter of 2011, (and) the anticipated H&M opening in the third quarter, as well as (at) the old Specialist Centre and Orchard Emerald.

“It’s been announced they are going to open up 250,000 square feet of retail, hotel and office space.

But with so many malls on Orchard Road, some retailers may find it hard to draw in the crowds.

Others believe that with more hotels and residences on Orchard Road, retail spending will surge.

“…Orchard Road is traditionally a launching pad for most of the new international brands coming to town. So we will foresee that to continue (evolving) along Orchard Road,” Mr Goh said.

“At the same time, there will be new hotel rooms — at least 500 to 600 (of them) on Orchard Road in the next four years”.

Orchard Residences, which has 175 units, will be completed by end of this year, while the 338-unit Scotts Square will be completed in 2011.

Meanwhile, older malls are also seeking a fresh start amid the stiff competition.

For example, the Tanglin Shopping Centre and the former Paradiz Centre POMO are now up for sale.

More suburban malls like Nex should emerge soon enough.

Temasek Polytechnic’s Retail Management course manager Samuel Tan said: “I think the suburban malls have a lot to offer because they have strong catchment and good traffic footfall.

“That itself forms a very strong reason for the shopping mall to be set up there.

“Nex has two supermarkets under one roof — they have FairPrice as well as Cold Storage, they have Kopitiam as well as other other food court operators. I think all this does give the consumers better variety”.

While shops can look forward to thicker profits, the outlook for retail investment is cautious.

Colliers International director of retail Charles Ng said: “We have the Ion, Orchard Central, 313, Mandarin Gallery and Knightsbridge. So that’s quite a lot of space on Orchard Road.

“There’s abundant supply, but having said that, (the) take up rate is quite healthy and so rents have remained stable as a result of that”.

Rentals for prime shopping space are about S$40 per square foot per month.

And the year ahead should see retail rentals growing slightly.

“With the economy growing at four to six per cent, I think retail rents will even inch up if you ask me. For suburban areas, maybe one to two per cent at least,” Mr Ng said.

“Orchard Road should see a bigger growth – it can grow up to about five per cent.”

Analysts add that with the new Marina Bay Sands, nearby office buildings in the central business district will attract big brand names.

MAC Cosmetics, The Hourglass and Swarovski Crystals are some stores which have set up branches in the district.

Source : Channel NewsAsia – 23 Dec 2010

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