Rents at two upcoming Orchard malls could hit $60 psf

RETAILERS who take up space in Orchard Road’s two new malls - slated to open in 2008 - can expect to pay as much as $60 per sq ft per month (psf pm).

Yesterday, both CapitaLand’s Ion Orchard and Far East Organization’s Orchard Central unveiled their retail concepts.

Ion Orchard - the newly named retail component of a $2 billion retail and luxury-residential project developed by Singapore’s CapitaLand and Hong Kong’s Sun Hung Kai Properties - will feature duplex flagship stores of six carefully-selected luxury brands.

These stores will be among some 400 retail, F&B and entertainment stores occupying some 660,000 sq ft of net lettable area on eight levels.

Rentals at Ion Orchard will range from ‘$20 to over $60 psf pm’, said CapitaLand Retail chief executive Pua Seck Guan. ‘We have already received offers from many retailers, but we are not in a position to disclose anything,’ he said. ‘We are confident that we will have close to 100 per cent occupancy by the time we open.’

A soft opening is expected by end-2008, with the grand opening scheduled for first-half 2009.

Over at the other end of Orchard Road, Far East Organization yesterday began officially marketing Orchard Central - almost one year after it first announced the mall’s name.

About 500 retailers turned up at the marketing launch. Orchard Central is expected to be completed in the third quarter of 2008.

Danny Yeo, executive director of property consultancy Knight Frank, expects rents at the mall to be $18-$60 psf pm.

The mall will boast a unique ‘cluster’ concept, with shops grouped into eight different clusters - such as Youth, Highlife and Food Haven - occupying a total net lettable area of 250,000 sq ft. There will be no anchor tenants like large departmental stores, supermarkets or cinemas.

And in a first for Singapore, all shops at Orchard Central will be open until 11pm everyday. ‘We told the retailers, if you sign up with us it will be from 11am to 11pm’ said Vivienne Tan, president of Far East Retail Consultancy.

Both malls expect foot-falls of 80,000 to 100,000 on weekdays and around 20-50 per cent more shoppers on Saturdays and Sundays. Although both malls will open around the same time, the developers maintain there will be no competition for retailers or shoppers.

‘Orchard Central has a very different positioning (from Ion Orchard),’ said Far East’s Mrs Tan. ‘And we are at the other end of Orchard Road.’

Ion Orchard is located right on top of Orchard MRT station, while Orchard Central is close to Somerset MRT station. Retailers, said Mrs Tan, can have a store in each of the malls.

Similarly, CapitaLand’s Mr Pua said that with no major shopping centre having come up in Orchard Road for more than a decade, there will be a lot of pent-up demand for the new malls. ‘In terms of location, we have a better location.’ He added that CapitaLand could eventually sell its 50 per cent stake in Ion Orchard to its listed real estate investment trust (Reit) CapitaMall Trust (CMT).

‘CapitaLand’s strategy is very clear - we have an asset light strategy,’ he said. ‘At the end of the day, we would like to monetise CapitaLand’s stake.’

Source : Business Times - 17 Jul 2007