CapitaMalls Asia has up to $3b to develop, buy malls

It is setting its sights on growth markets of Singapore, China and Malaysia: CEO

CAPITAMALLS Asia (CMA) has a potential war chest of some $2.5-3 billion for developing and buying malls, and it will be targeting its firepower at Singapore, China and Malaysia.

The retail property group's shares may have been hovering below the initial public offering price, but they should perform better in the longer term.

CMA chief executive Lim Beng Chee shared these views in an interview with the press yesterday. The group is sitting on around $1 billion of cash, which includes proceeds from the listing of CapitaMalls Malaysia Trust (CMMT) and the sale of Clarke Quay to CapitaMall Trust.

With that, the group can borrow another $1.5-2 billion for investments. This situation presents a 'very good opportunity' for acquisitions, he said.

In Singapore, the market has improved from a year ago, Mr Lim said. The economy has picked up, retail sales have grown, and tourist arrivals have increased.

CMA is eyeing state land for mall developments, and it is particularly keen on areas where it already has a presence. These would include the Jurong district, where IMM and the upcoming JCube are.

The group had bid for a mixed-use site in the Jurong Lake district in June, but lost out to Australian developer Lend Lease. 'It's ok, there are always sites two and three' in that area, Mr Lim said.

Another plot of interest is the one at Stamford Road/North Bridge Road, where Capitol Theatre is. The tender for the site will close next month and the winning developer can build an underground link to City Hall MRT station. Raffles City Singapore, which CMA has a stake in, is right next to the station.

Asked if CMA will be bidding for that land parcel, Mr Lim said: 'We'll consider any site.'

There have been concerns about an oversupply of retail space in Singapore but Mr Lim believes in just the opposite. 'My problem is, I've got no space.'

According to him, many global retail brands such as Abercrombie & Fitch are not here because they have a problem finding space for large flagship stores.

Besides Singapore, China remains a key growth market for CMA. The Chinese government is trying to boost domestic consumption for economic growth and CMA can benefit from that trend, Mr Lim said.

In Malaysia, CMA is also looking to acquire or develop malls. It is setting up a RM1 billion (S$428 million) fund for this.

Despite the many growth plans, investors appear unexcited. CMA's shares have been trading below their listing price of $2.12 in the last one month. The counter closed unchanged at $2.05 yesterday.

'I think a lot of shareholders don't understand this business,' Mr Lim said, explaining that CMA runs longer term operations of building and managing malls.

On the gap between the share price and the listing price he said: 'My sense is, we can actually overcome this very easily.

'It's a question of us making a few acquisitions over time that could actually correct the share price... I have no doubt that over time it will correct.'

Source: Business Times, 29 Jul 2010

Causeway Point to get $72m facelift

CAUSEWAY Point is embarking on a $72million facelift to better serve the 300,000 residents in Woodlands.

The 12-year-old mall at the Woodlands regional centre is part of the portfolio that makes up Frasers Centrepoint Trust (FCT), which yesterday reported record third-quarter earnings.

For the three months to June 30, FCT achieved a 34.6per cent rise in income available for distribution to $16.3million. This translates to a 6.7per cent rise in distribution per unit to 2.07 cents.

During this period, gross revenue rose by 44.7per cent to $30.7million, while net property income climbed by 46.3per cent to $21.5million.

The upgrading of Causeway Point - FCT's crown jewel - will boost income and 'provide further organic growth in years to come', said Dr Chew Tuan Chiong, chief executive of the manager of FCT.

Opened in 1998, the seven-storey mall has a net lettable area (NLA) of about 418,500 square feet. To unlock value, space occupied by 'big box' tenants, for example, Metro department store, will be reduced to 50per cent of NLA from 65per cent currently.

'As specialty tenants pay higher rentals in view of their smaller footprint, this will help to raise average rental at the mall,' the FCT manager said.

To improve visibility of shops and create new retail space in prime locations, escalators at the mall will be moved to more convenient areas. A new food and beverage cluster on level five will be created.

Overall, the 30-month upgrading is aimed at increasing net property income by 22 per cent to $51.5million.

A review of its third-quarter results showed that FCT was successful in raising rents. Rental from renewal and replacement leases commencing during the quarter at Causeway Point and Anchorpoint saw an average increase of 8.5 per cent over expiring leases. The occupancy rate of all its properties remains at 99.4 per cent.

FCT units yesterday fell one cent to $1.39.

Source: Straits Times, 24 Jul 2010

New Phoenix emerging on Orchard Road

Plans for former Specialists' Shopping Centre and Hotel Phoenix site include 500 hotel rooms, 224,000 sq ft of retail space

A NEW shopping and hotel destination is set to take the Orchard shopping belt by storm in 2013. On offer are 500 hotel rooms and about 224,000 sq ft of retail space, as well as two open plazas for busking and artist performances.

This is the plan unveiled by United Engineers Ltd during the groundbreaking ceremony yesterday for the site that previously housed the Specialists' Shopping Centre and Hotel Phoenix complex - which has a gross floor area (GFA) of 538,196 sq ft. The development is designed by internationally-renowned architectural firm Tange Associates.

The property group was appointed by OCBC to build the shopping cum hotel destination in June through an arrangement that allows OCBC to retain ownership of the prime Orchard Road property after the redevelopment is complete.

Directly opposite this refurbished shopping and lifestyle destination is the 218 Orchard Road site (previously the home of Orchard Emerald). Like its sister sitting on the other side of the road, the site, which occupies a GFA of 104,410 sq ft, will be developed into an 11-storey building with two basement floors. About 37,674 sq ft of space will be devoted to offices, while 29,063 sq ft will be retail space. The site will be developed by OCBC's insurance subsidiary Great Eastern Life, and UEL will act as project manager.

To provide a seamless way for pedestrians to make their way to and from the two destinations and to the Somerset train station, a glass pedestrian bridge linking the development to the property sitting opposite - formerly Orchard Emerald - is also in the works by UEL. It will also be constructing an underpass that will help to link the hotel cum retail property to the Orchard Emerald site. The redevelopment of the Specialists' Shopping Centre site, along with the construction of the glass bridge and underpass, is slated for completion in the second quarter of 2013.

OCBC said that the total development costs for both properties is about $700 million, with about $150 million to be spent on the old Orchard Emerald site.

Said Jackson Yap, group managing director and chief executive of UEL on the former Specialists' Centre development: 'Its unique architecture that straddles both sides of Orchard Road, and with the glass overhead bridge, will offer a new postcard view of Orchard Road.

'With the glass overhead bridge, the Orchard Road Christmas Light-up will also have new decorative possibilities. We strive to create a new focal point in Orchard Road that will be buzzing with activity and excitement.'

Source: Business Times, 17 Jul 2010

New retail, hotel & office project on Orchard Road

Singapore’s Orchard Road will be adding another new face to its shopping belt.

A retail, hotel and office development will soon come up at the sites of the former Specialists’ Centre and Hotel Phoenix, as well as Orchard Emerald mall.

The project, costing some S$700 million, is expected to be completed in the second half of 2013.

A groundbreaking ceremony on Friday marked the start of the redevelopment of three neighbouring sites on Orchard Road.

Where the former Specialists’ Centre and Hotel Phoenix used to be, a new 4-star hotel with about 500 rooms will come up, along with nearly 21,000 square metres of retail space.

United Engineers (UEL) is the developer of the site, which is wholly owned by OCBC.

Across the road, the former Orchard Emerald site will contain around 3,500 square metres of office space and 2,700 square metres of retail space. The site is wholly-owned and developed by Great Eastern Holdings.

The two sites will be connected by a glass overhead bridge across Orchard Road, which developer UEL said is the first in Singapore.

UEL is not concerned that its new development is a relatively latecomer in the saturated Orchard Road shopping strip.

Jackson Yap, CEO, United Engineers Limited, said: “We are the last of the jigsaw that would make this into a significant shopping area. The key to this is connectivity.

“You can go seamlessly in bad weather and so on, into the three shopping malls. You can cross the street, and also shop on the other side of the road.”

The new development will also be connected by passageways to its neighbours 313@Somerset and Orchard Central. Its Basement 1 will also be connected to the Somerset MRT station.

UEL said it is confident it can generate decent foot traffic.

Mr Yap said: “Phoenix Hotel has always been well-occupied, partly because of its location and also its proximity to many shopping malls. So we expect the hotel to be full and the hotel is full because we have good shopping tenants!”

A key tenant will be a new Singapore Visitors Centre, but the developers are keeping mum on the retail mix for now.

Observers say the new development may also feature some high-end brands, given Orchard Road’s reputation as a premier shopping belt.

Source: Channel News Asia, 16 Jul 2010

Katong Mall gets $60m facelift

Makeover to give 20-year-old mall a cinema, mix of F&B outlets and upmarket brands

THE 20-year-old Katong Mall in East Coast Road will undergo a $60 million facelift.

When it reopens in the third quarter of next year, the mall will have about 150 shops including a cinema, retail outlets as well as a myriad of food and beverage outlets, pubs and bars.

The current five-storey building will have an additional floor built at the top to house a Golden Village cineplex.

There will also be an additional basement level to ease the building's parking squeeze. The extra level will boost the maximum capacity of its carpark to 310 spaces, from the current 179.

The mall will also have a Peranakan-themed concept to fit the neighbourhood, which has historically been a Peranakan enclave in Singapore. The management said it will also consider bringing in tenants that tie in with the theme, such as Peranakan restaurants.

The new look for Katong Mall is the developer's overall plan to jazz up the building to appeal to the affluent working professionals living in the area.

Previously, the tenants in the mall were mainly educational and child enrichment services such as tuition and dance classes.

'We hope to better the experience for our retail customers as we redevelop the site into a more vibrant hub with an exciting and desirable tenant mix,' said Mr Loh Chin Hua, managing director of Alpha Investment Partners, which holds a majority stake in Katong Mall.

The mall, which will be renamed, was bought over earlier this year from Tuan Sing Holdings for $247.55 million.

The new owners are a consortium of investors brought together by Mr Pua Seck Guan, chief executive officer of Perennial Real Estate.

The mall had previously faced controversy when 23 of its former tenants banded together to lodge a protest with the Strata Titles Board against the collective sale of the shopping complex in late 2007. The matter was eventually resolved early last year when the objection was withdrawn by the tenants.

All previous tenants have now moved out and the new management said there are no immediate plans to bring any of them back.

'We have to consider the positioning of the new mall as a lifestyle and F&B hub,' said Mr Pua. 'However, we will still consider the old tenants if they fit in with this concept,' he added.

In the past, the mall was largely patronised by young students on their way to various enrichment programmes and after-school activities.

Now, the management wants to attract professionals in the vicinity who have spending power.

Mr Pua said the new mall will aim for more upmarket brands to draw in those who live nearby, who mostly live in private houses and condominiums.

The mall has already signed up three anchor tenants - Golden Village (GV), Cold Storage and BreadTalk Group - which will occupy about 32 per cent of the available space between them.

GV's eight screening halls will have two of its more upmarket Gold Class halls - the first such halls in the eastern part of the island.

Cold Storage's supermarket will also be of a more upscale concept, known as Market Place, which is also the first in the east. Other Market Place outlets are found in the city, such as in shopping complexes Paragon and Tanglin Mall.

The revamped mall is also a first for several other reasons.

It is Mr Pua's first local venture in property since stepping down as chief executive of CapitaLand Retail in November 2008, after about eight years with the company.

It will also mark BreadTalk's first venture into retail property investment as it holds about an 8 per cent stake in the mall.

BreadTalk chairman George Quek said: 'After 10 years of opening our food and beverage outlets in malls, I've seen and learnt how they work. This area also suits us as we do not have many of our brands here.'

The BreadTalk Group operates the BreadTalk bakeries, Food Republic food courts, and the Din Tai Fung and RamenPlay restaurants.

To Katong residents, this new shopping mall is a welcome addition to the neighbourhood.

'I'm really looking forward to having a movie theatre in the area because it will be so much more convenient when I want to catch a late-night movie,' said Ms Jacqueline Tan, 23, who lives in East Coast Avenue.

'More parking space would be great along that stretch of road which is notorious for its limited spaces,' she added.

-------------------------------------------
New name, new look
Previously
Katong Mall used to house mainly educational and child enrichment services, such as tuition and dance centres.

After revamp
The mall will be renamed and turned into a lifestyle and food and beverage hub with a Peranakan-themed concept.

There will be 150 shops including a Golden Village cinema, Market Place supermarket, other retail and F&B outlets.

Source: Straits Times, 10 Jul 2010

A day at The Heeren: IT’S OH SO QUIET

Tenants hope new lifestyle store will lure crowds back to deserted mall, a former youth hangout

It was lunch time last Wednesday at The Heeren Shops in busy Orchard Road.

You would think the eateries at its basement and on the fifth floor would be packed, but, at Thai Express, only a handful of tables were occupied.

Just two shop spaces away, at Fish & Co, not even one customer was spotted.

And it was not only the eateries that were deserted.

Manicurists at The Nail Spa & Wellness chit-chatted and worked on each other’s nails.

A hairstylist at UrbanHair by Ginrich was busy – fussing over his own hair.

There were no customers at either shop.

The shopping mall, a popular hangout with young adults about four years ago, has lost a lot of its vibe.

A former anchor tenant, music store HMV, has packed up and gone, and glitzy malls like Ion Orchard and 313@Somerset are now the new buzzwords with shoppers.

‘When The Heeren opened, people had to squeeze through crowds, and I’d see about 200 people walk past in an hour,’ said Mr Richard Tat, 51, owner of Body Decor Tattoo and Piercing.

‘These days, hardly anyone walks by,’ said the Heeren tenant of 10 years, who now depends on regulars for business.

Days can be slow. Last Wednesday, six hours after he started work at noon, the tattoo artist had done just one tattoo and one piercing and had sold a replacement ball for a navel ring.

Indeed, that day was not a good one either for many other tenants, going by what The Sunday Times observed between 9.45am and 10pm.

We saw people venturing into the six-storey mall, but many just window shopped on the first floor before walking out.

Most of those interviewed said they were looking only for a specific item and were not interested in checking out the shops.

Even fewer bought anything.

Certainly, at 2pm, there were no shoppers in the youth zone on the fourth floor, as loud techno music blared from some shops.

Around 6pm, things got a little better. We counted about 30 people on the fourth floor, which is occupied mostly by shops selling apparel.

But there were fewer than 15 patrons at the restaurants on the fifth floor.

The dearth of traffic was despite at least 19 shops in the mall offering discounts of up to 75 per cent, though Pasta de Waraku’s student discount of 25 per cent seemed to be working.

It was the only restaurant on the fifth floor that was half-full at 1.30pm and 8.30pm. Other eateries were, at the most, about one-fifth full.

It was the same story with the basement eateries.

They were mostly empty, save for the newly opened Kiseki Japanese Buffet Restaurant, which attracted a queue.

When the music stopped

Tenants have been wringing their hands ever since HMV pulled out in January this year. The music store relocated across the road to 313@Somerset, less than a five-minute walk away.

‘When HMV was here, we would be able to get more foreigners and increase our sales. Without it, we see a 30 to 40 per cent decrease in sales,’ said Ms Cherly Wong, store manager at shoe and apparel outlet Converse on the third floor.

Fewer customers could have prompted some tenants to pull out. The Sunday Times estimated that 25 per cent of shops were available for lease.

According to Swee Cheng Management, the company that manages the mall, it has an incoming tenant, hairdressing salon Shunji Matsuo. It is in talks to fill up six units.

Efforts have been made to keep up with the changes in the Orchard Road area.

The 14-year-old Heeren was renovated two years ago, with changes made to the basement and fifth floor to make for more retail and recreation space.

Last year, an outdoor refreshment area was built and several eateries, such as McDonald’s, set up shop.

Last month, the mall even hosted this year’s Manhunt Singapore in a bid to whip up excitement.

Shoppers, however, remained lukewarm.

Ms Jocelyn Chan, 22, a Singapore Management University student, said she used to shop at The Heeren during her secondary school days, when it was still a trendy hangout.

Now, she prefers malls that carry international brands like Zara and Topshop. ‘These days, I come only when the eating places at other malls are too crowded,’ she said.

Tenants are now banking their hopes on ALT, the new anchor tenant which takes up the space vacated by HMV.

ALT, a lifestyle concept store targeting shoppers from their mid-20s to mid-30s, opened last Thursday.

Mr Ignatius Koh, 27, owner of Coalition Store, which sells clothes and accessories on the fourth floor, said: ‘The crowd has been slow because we’ve been missing an anchor tenant for three levels of shop space.

‘I’m expecting things to go back to normal once ALT opens,’ he said last Wednesday.

The folks at Indonesian restaurant Desa Kartika share the same hope.

‘We’ll be happier once the anchor tenant opens. It will revitalise Heeren again,’ said a spokesman.

Source: Straits Times, 11 Jul 2010

New Katong Mall attracts 3 key tenants

Cold Storage's Market Place, Golden Village and BreadTalk will lease about 32% of NLA

A NEW Peranakan-themed mall will soon take the place of the former Katong Mall and mark the debut mall for Pua Seck Guan's Perennial Real Estate in Singapore.

Mr Pua is CEO of Perennial Real Estate and formerly CEO of Capitaland Retail.

The mall, located at the junction of East Coast Road and Joo Chiat Road, will have a net lettable area (NLA) of 207,000 sq ft, 20 per cent larger than before.

It has already secured three key tenants. Cold Storage's Market Place will take up about 13,000 sq ft of space. Meanwhile, Golden Village multiplex will take up 30,000 sq ft, boasting eight halls, two of which will be Gold Class Halls. This will be a first in the eastern part of Singapore. The third key tenant is George Quek's BreadTalk group, which will open a 15,000 sq ft Food Republic Food Atrium and 7,500 sq ft of restaurants such as BreadTalk, Din Tai Fung and Toastbox.

The space leased by these three tenants will amount to about 32 per cent of the NLA.

The mall will feature six levels of retail - basement 1 and from level 1 to 5, with an atrium on level 2. Basements 2 and 3 will have 310 carpark lots.

The mall is owned by Perennial Katong Retail trust, a private trust constituted for the purpose of buying Katong Mall. Investors in the trust include Alpha Investment Partners Limited's Asia Macro Trends Fund, which holds a majority stake of 77 per cent. It is a unit of Keppel Corp. Other investors include BreadTalk Group Limited and Mr Pua, among others. The mall will be managed by Perennial (Singapore) Retail Management Pte Ltd.

Katong Mall is currently undergoing redevelopment and is expected to be ready by the third quarter of 2011. The contract is worth $60 million and has been awarded to SEF Construction Pte Ltd.

'The expected rent is about $12 psf per month on average,' said Mr Pua.

The mall, designed by DP Architects, will reflect the Peranakan culture that surrounds the mall and seamlessly integrate itself with the many F&B outlets around the area. For example, the first two floors will be dedicated to F&B and bars that will operate till extended closing hours that will complement the surroundings and the cinema upstairs.

Mr Pua believes that the new mall will do better than the former strata-titled Katong Mall because it will come under single ownership, where Perennial Retail Management will be able to control the tenant mix and positioning.

About 30 per cent of the mall space is expected to be designated F&B with another 30 per cent dedicated to fashion and accessories.

Source: Business Times, 10 Jul 2010

More MRT retail areas coming

SMRT shares plans for Orchard, Circle Line at launch of Esplanade Xchange

SMRT is carving out a new shopping area at Orchard MRT station - and plans more such spaces at upcoming stations on the Circle Line.

The transport group shared the plans at the launch yesterday of Esplanade Xchange - a 2,000 sq m retail enclave at the Esplanade MRT station.

Teo Chew Hoon, vice-president of SMRT's commercial and taxi divisions, said that Orchard Xchange could be ready at the end of the year and will have a lettable area of around 1,500 sq m. The tender process for space has started and the group expects good take-up.

There are also plans for 'a few' Xchanges at MRT stations in Stages 4 and 5 of the Circle Line, Ms Teo said, without elaborating on where they might be. These stages of the line will run through such places as Botanic Gardens and Holland Village.

SMRT now has seven Xchanges. Esplanade Xchange is the third largest, after Raffles Xchange (about 2,400 sq m) and Tanjong Pagar Xchange (about 2,000 sq m). The group has about 29,000 sq m of retail space across the SMRT network.

Esplanade Xchange is fully let and there will be 26 shops. Tenants include the Infocomm Development Authority of Singapore's iExperience centre, Coffee & Toast, Dunkin Donuts and IT gadget retailer Juzz1. More than 90 per cent of the outlets have opened and all will be operating by the middle of this month.

Rents at Esplanade Xchange are at 'market rates', Ms Teo said, declining to elaborate further. At the nearby Suntec City Mall, the committed average passing rent was $10.89 per sq ft per month in March, according to Suntec Real Estate Investment Trust's first-quarter financial results.

Ms Teo said that Esplanade Xchange's location is a strong selling point. It is near Suntec City, Marina Square, CityLink Mall and Bras Basah, and will be directly linked to Raffles City Shopping Centre around the middle of the month. She expects pedestrian traffic to grow after the Circle Line is completed.

Juzz1 general manager Warren Teh said that the store has about 600 walk-in customers a day, and he expects the number to grow after the link to Raffles City opens.

SMRT shares closed unchanged yesterday at $2.32.

Source: Business Times, 9 Jul 2010

Three-floor ALT concept store opens in Heeren

TODAY marks the opening of the ALT concept store at The Heeren Shops on Orchard Road.

The shop covers three floors and takes up the space that was formerly the HMV music store. This space amounts to over 23,000 square feet. The price range for the store is 'moderate to the high side'.

The concept shop is split into three parts. ALT1, which covers the first floor, will feature ladies' shoes and accessories, make-up and beauty accessories, some of which are imported exclusively for ALT from Korea and Thailand. ALT2, which covers the second floor, features clothes and women's lingerie.

ALT3 covers the third floor and occupies over 12,000 sq ft of space. This floor presents a wider array of brands, and is categorised into many different zones throughout the level, such as novelty gifts, beauty and wellness, and lifestyle gadgets. It also features 500 sq ft of space dedicated to men's grooming.

The store brings together different brands throughout Asia such as Broadcast, a Shanghainese label targeted at females in their 20s and 30s.

'We are excited to have unique and exclusive brands at ALT, which will set the concept store apart from the others,' said Sosuke Nishiwaki, executive director of BHG Singapore.

With the exit of HMV, Heeren was looking for something 'fresh and alternative' when it approached BHG.

ALT was inspired by Japanese concept store LoFT and the idea had been on the drawing board for several years. When Heeren approached BHG, its management decided it was the opportune moment to turn the idea into reality.

BHG spent over a year researching consumer wants, behaviour and habits before finalising the design and concept.

The designer of the store is NODE, a retail specialist and subsidiary of Nomura Kougei of Japan.

With regard to rental, prices for the prime retail space at The Heeren Shops are now comparable to those in suburban locations. The rental price gap between Orchard Road and suburban locations has been narrowing due to the influx of supply in the Orchard area.

The concept store is targeted at people in their 20s and 30s as well as tourists. The shop is open every day till 10pm.

Source: Business Times, 8 Jul 2010

New concept store ALT to heat up competition along Orchard Road

Orchard Road is about to see more retail competition. A new concept store ALT is aiming to target young female shoppers who love fashion from the current staple of malls on the prime shopping strip.

ALT will be spread over three levels at the Heeren shopping mall on Orchard Road. It is hoping to attract shoppers with its slate of Asian brands.

Its merchandise mix includes fashion, beauty and lifestyle products from Japan, Korea, Taiwan, Hong Kong, China and Thailand.

The store, managed by retailer BHG, said it is optimistic it can break even quite soon, given its prime location.

Sosuke Nishiwaki, executive director, BHG Singapore, said: “A lot of competition around will make people come to Orchard more, so we are quite confident that this area will generate a lot of profit.”

However, observers say it may be a challenge to sustain interest from shoppers, who are already spoilt for choice in the shopping strip.

They also cite the relatively small space occupied by ALT – at 23,000 square feet.

Charles Ng, director, Retail, Colliers International, said: “You can’t put that much products, range of products that can offer strong competition to the neighbouring malls.

“So if you ask me whether there is any impact, I’d say no – not really – but they offer a change, a new concept, something to look at. Who knows, it may take off.”

ALT is due to open this Saturday.

Source: Channel News Asia, 7 Jul 2010

Carrefour says not closing any stores in Singapore, Malaysia

Carrefour said it is not closing any of its stores in Singapore and Malaysia. In a statement, the company said it is “business as usual” for every store in the two countries.

It also said it had recently opened four hypermarkets in Malaysia this year and plans another four by year end.

Earlier this week, there was speculation that the French supermarket giant was in the early stages of selling its outlets in Singapore, Thailand and Malaysia.

Reports had said Carrefour could be offloading its Southeast Asian assets for up to US$1 billion.

In May, Carrefour’s CEO Lars Olofsson said he was open to offers for the company’s operations in markets where it isn’t in the top two spots.

Analysts cited Thailand, Malaysia and Singapore as likely candidates.

They added that the sale of assets in these countries would make sense as the company has other priorities for investment.

Under Mr Olofsson’s direction, Carrefour has focused efforts on its key European markets — France, Spain, Italy and Belgium.

France alone accounts for nearly half of the company’s annual revenues.

The fast-growing China and Brazil markets have also been priorities for the company.

Reports also said that the British supermarket chain Tesco was interested in Carrefour’s stores in Singapore, Thailand and Malaysia.

Other firms in the running for Carrefour’s shops in Thailand and Malaysia are said to be Big C Supercenter PCL, Dairy Farm International and Japanese supermarkets.

Analysts said if a single buyer emerges for all three countries, the deal will probably be wrapped up this year.

Source: Channel News Asia, 7 Jul 2010

Older malls losing shoppers, and shops

Orchard retailers moving to new sites with higher traffic

OLDER malls in Orchard Road are seeing smaller tenants jump ship because of the ever-changing flow of shoppers coursing through this prime area.

Smaller retailers at complexes such as The Heeren, The Centrepoint and Midpoint, say customers are more attracted to their shiny new neighbours Ion Orchard, 313@Somerset and the Mandarin Gallery.

At The Heeren, there are more than 20 boarded-up shop spaces and only about 60 tenants in operation. Business has halved in the past year for clothing store Mon Chavon, said its manager, Ms Wan Choy Kun. 'Sometimes, we get our first customer at 6pm. Then we hear them say the place is so empty they will not come here again.'

She hopes business will pick up when the mall's new anchor tenant, department store ALT, opens on Saturday.

Some businesses have seized the upper hand by migrating to the new malls, while others are closing down. In response, the managements of the malls are working to reinvent themselves.

The Heeren is one of them, but the revamp has come too late for designer shoe chain Limited Edt Vault, which moved out in April. Owner Mandeep Chopra opened two new outlets, at 313@Somerset and Marina Bay Sands (MBS), saying there were 'no walk-in customers at all' at the shop in The Heeren.

'The traffic has moved to the newer malls. It was a no-brainer to shut down the Heeren store and move elsewhere,' he said. The rental at 313@Somerset is similar to that at The Heeren, he added.

Ossia International, which manages brands like Camper and Springfield, pulled its Camper shoe store out of The Heeren in March, before its lease ended, and opened two outlets in Ion Orchard. Brand manager Pauline Sing said it left because of 'bad sales performance' with 'only about 10 walk-in customers a day'.

Down the road, at The Centrepoint, skincare chain L'Occitane moved out on June 24 and opened at MBS in the same month. Another tenant, handbag shop Furla, called it quits in May, after opening an outlet in Ion Orchard last year.

Men's clothing store Caserini will close down later this month when its lease ends, as it is in the red, said its spokesman. 'We were badly affected, especially when 313@Somerset opened.'

At Midpoint and Orchard Plaza, two of the older malls in Orchard Road, outlets such as Burger King, Midpoint Electronics and This Fashion have moved out in the past six months.

Not all malls have seen their tenants bail, however, with Ngee Ann City and Paragon and their higher-end tenant mix relatively unfazed.

And long-time stalwarts such as Robinsons at The Centrepoint are still packing them in. Robinson Group spokesman Donna Chua said it had 'no plans to move out of The Centrepoint'.

'We are fortunate to have a strong customer base, many of them long-standing and loyal customers,' she said.

The Centrepoint is working on 'improving tenant mix and introducing new concepts' to pull in more shoppers, said Frasers Centrepoint Malls general manager Wendy Low.

This includes a basement foodcourt which features new dishes such as crab roe dumplings from Shanghai, she added.

Acknowledging the recent departures at The Heeren, a spokesman for Swee Cheng Management, which manages the mall, said it is currently 'repositioning to focus on a new target market of the young and sophisticated professionals, managers, executives and businessmen crowd'.

ALT is an exclusive new entrant which will occupy three levels of prime space in the mall, he added.

About 1.5 million sq ft of lettable retail space was added to Orchard Road in the past year, said Orchard Road Business Association chairman May Sng, an increase of 25 per cent.

'In such a situation, there will definitely be cannibalisation,' she said.

Singapore Retailers Association president Jannie Tay said a ready supply of retail space has led to business owners being able to pick and choose.

'At the moment it's a retailers' market. They have more choice now and will get out of unprofitable places,' said Ms Tay, who suggested landlords reduce rents to make their malls more attractive to retailers or offer other incentives.

Old or new, Orchard Road malls also face competition from big suburban malls. Estate agents say they are drawing more shoppers, which consequently drives up rents at the more popular malls in the suburbs.

Source: Straits Times, 6 Jul 2010

Rents at suburban malls catching up with Orchard Rd

Upper levels in such malls already drawing higher rents than equivalent space in Orchard and Scotts area, says DTZ

(SINGAPORE) Rents at suburban malls in Singapore are fast catching up with those for prime Orchard Road retail space as neighbourhood malls draw increasing shopper numbers and more interest from tenants.

The difference between prime Orchard Road rents and suburban rents narrowed to just 9 per cent in Q2 2010 - from as much as 24 per cent at the start of 2009 and 21 per cent in Q1 2005 - according to CB Richard Ellis (CBRE).

In fact, upper-storey space at these suburban malls is already more expensive than upper-storey space in the Orchard Road and Scotts Road area, according to data from DTZ.

The rental gap tightened as Orchard Road rents fell for the seventh consecutive quarter while suburban rents continued to edge up in the second quarter of 2010, CBRE's data shows.

Prime Orchard Road rents fell to $31.10 per square foot per month (psf pm), reflecting a 3.4 per cent decrease from $32.20 psf pm in Q1 2010.

Suburban malls, on the other hand, saw a 1.4 per cent quarter-on-quarter increase in prime rentals to $28.50 psf pm.

And when it comes to retail space on the upper floors, suburban malls are in fact fetching more than their Orchard Road and Scotts Road counterparts.

According to DTZ, upper-storey rents at suburban malls inched up 0.4 per cent quarter-on-quarter to $22.90 psf pm in Q2 2010, while upper-storey rents in the Orchard Road/Scotts Road area stayed flat at $20.50 psf pm.

Analysts said that rents in the Orchard Road area are depressed after a large amount of new supply - from malls such as Ion Orchard, 313@somerset and Orchard Central - came onstream over the past year.

'Competition in the Orchard Road and Scotts Road and other city areas has intensified and the increased range of retail choices has rendered consumers to be more selective in their purchases,' said Anna Lee, DTZ's associate director for retail.

'Retailers, particularly in the newer malls, are adjusting to the vagaries of consumer preferences and resulting in early termination of leases in some cases,' she added.

In contrast, rents in the suburban areas continued to edge up in the second quarter of 2010. Suburban malls, with their built-in catchment of shoppers and mass market offerings, largely performed better than malls in the city during the financial crisis.

These malls, which draw more and more shoppers every year, are now able to command higher rents from tenants.

'Generally, 2009 shopper traffic at our suburban malls is higher than that in 2008,' said a spokesman for CapitaMall Trust (CMT). CMT has eight suburban malls in its portfolio.

Frasers Centrepoint Trust (FCT), which owns four suburban malls, also said that footfall across its portfolio rose 6 per cent from the 2008 financial year (October 2007 to September 2008) to the 2009 financial year (October 2008 to September 2009). The figures exclude Anchorpoint, where traffic counters were removed for asset enhancement works.

The increased visitor numbers have translated into higher rents for both retail trusts.

FCT said that in the first six months of its 2010 financial year (October 2009 to March 2010), its portfolio achieved average rental reversions of 4.5 per cent. And for the suburban malls in CMT's portfolio, the rate of average rental growth per year ranged from 1.1 per cent to 2.3 per cent in Q1 2010.

Developers are extremely bullish on the potential of suburban retail space here.

Australian developer Lend Lease, which paid $749 million for a mixed-use land parcel in the Jurong Lake district, intends to build a suburban shopping mall on most of the site.

Lend Lease, which owns the 313@somerset and Parkway Parade shopping malls here, is required to set aside a mandatory 30 per cent of the gross floor area for office use. But the remaining 70 per cent will be used solely for retail space, said Ooi Eng Peng, executive officer for retail and investment management in Asia for Lend Lease.

'The mall will be the Parkway Parade of the west,' Mr Ooi said. Suburban malls offer good prospects for developers who can come up with the right tenant and product mix for the surrounding catchment population, he added.

Looking ahead, the gap between prime Orchard Road rents and prime suburban rents will narrow even more over the rest of this year as Orchard Road rents dip further.

'We expect prime Orchard Road rents to dip 5 per cent to 10 per cent in 2010 due to the settling of business and trading patterns,' said Letty Lee, CBRE's director for retail services. 'But prime suburban rents are likely to see a 3-5 per cent upside in the same period, underpinned by catchment demand.'

But it is not all doom and gloom for malls on Singapore's best-known street; analysts expect that over the next two to three years, rents in the Orchard Road will rebound.

Source: Business Times, 5 Jul 2010

Chain stores head for Serangoon Garden

Neighbourhood icons make way as new mall makes area a hot spot for big-name shops

BIG business is moving into Serangoon Garden.

One of the area's most iconic outlets, the famous Posin Hainanese Chicken Rice stall, will soon make way for a Citibank branch.

The tenants at the 40-year-old coffee shop at the junction of Serangoon Garden Way and Chartwell Drive - the oldest in the area - have been told to leave by the end of the month, and Citibank will begin renovations in August. The branch is expected to open in the fourth quarter of the year.

As a result of being forced out, three of the coffee shop's six stalls are shutting down for good. The others have found alternative locations nearby.

Posin, for instance, is moving two units away, into an air-conditioned restaurant. It will be more comfortable for customers, said its manager Tang Mun Cheong, but he admitted that prices will have to go up as a result.

Citibank is the latest big entrant into the Serangoon Garden area, which is very popular among residents and others.

Other big chains that have moved in - and forced out long-time small businesses in the process - include Harry's Bar, Sushi Tei and Cold Storage.

They have replaced, respectively, a second-hand watch shop, a neighbourhood pub and a quaint ceramic crockery shop.

Early last year, the neighbourhood's key feature, the 50-year-old Paramount Theatre complex, was torn down. Construction of a $40 million mall, called The Village, has started, and it will open in the third quarter of this year, adding 38,000 sq ft of retail space and more big names, including dessert cafe Bakerzin, ice cream parlour Udders Ice Cream and Japanese ramen restaurant Menya Manpei to the mix.

The Serangoon Garden area is seen as a neighbourhood jewel among big-name retailers, and demand for space among them is rocketing.

Citibank Singapore's head of retail banking, Ms Ong Lay Choo, said of its 'takeover' of the coffee shop: 'Serangoon Garden, a thriving hub with a growing affluent and emerging affluent population, is an ideal place for us to open our 23rd branch.'

Mr Colin Tan, director of research and consultancy at real estate consultancy Chesterton Suntec International, said the new mall has acted as a beacon in drawing the big chains to the neighbourhood.

'All these big names like Harry's are moving in because they see that the place will be more of a magnet once the mall opens,' said Mr Tan, who has done research on the area.

'Customer traffic will increase, and people from nearby neighbourhoods and elsewhere will visit Serangoon Garden.'

The changes, said Singapore Polytechnic marketing and retail lecturer Andrew Lee, reflect consumers' increasing love of suburban haunts.

'It links to a lifestyle change. Time-starved Singaporeans value time and convenience above all else,' he said, adding that mall developers are stepping up to satisfy that demand.

'In response, developers are creating new catchment areas in the suburbs where rent is lower compared to the city area.'

The big boys are also packing a lot more cash to entice small business owners with.

The owner of the coffee shop that will close, Mr Loi Boon Kee, 55, said he was approached by Citibank last year. The banking giant offered him more than $30,000 a month in rent, he said, 40 per cent more than what he currently collects.

The father of two, who runs the drinks stall at the coffee shop, said with a tinge of regret: 'I have grown with Serangoon Garden, and we were the first coffee shop here when the place was filled with pushcarts with food.

'But the offer was too good to resist, and I am getting old.'

Meanwhile, Serangoon Garden residents are looking forward to the increasing options at their doorstep, but wary that traffic congestion at the estate will only get worse.

'I have always felt that we had not enough shops in the area, it is always the same old thing, so boring,' said housewife Jenny Tan, 53.

'I am only afraid that the traffic problem here will get worse. The weekends are already quite bad, especially near the roundabout and the market.'

Source: Straits Times, 24 Jun 2010

Downtown retail rents ease in Q2: DTZ

LANDLORDS of retail space located in the city had little to cheer about in the second quarter.

According to a DTZ report yesterday, retail rents at Orchard Road and Scotts Road stayed flat, while those in other areas downtown fell slightly as more space came onstream.

The property consultancy found gross rents of prime first-storey space in the city outside Orchard Road and Scotts Road dipping 0.4 per cent quarter-on-quarter to $24.30 per sq ft per month (psf pm). Upper-storey rents in the same areas slipped 0.7 per cent to $13.90 psf pm.

The emergence of more retail space contributed to this. Over 815,000 sq ft of space was completed in the city outside Orchard Road and Scotts Road in Q2, DTZ said. The Shoppes at Marina Bay Sands accounted for most of this.

At Orchard Road and Scotts Road, prime first-storey rents remained at $39.70 psf pm in Q2, unchanged from the previous quarter. Upper-storey rents also stayed at $20.50 psf pm.

'Competition in the Orchard/ Scotts Road and other city areas has intensified' and consumers have become more selective with the increased range of retail choices, said DTZ associate director of retail Anna Lee.

'Retailers, particularly in the newer malls, are adjusting to the vagaries of consumer preferences, resulting in early termination of leases in some cases.'

The consultancy's longer term outlook for retail rents at Orchard Road and Scotts Road is brighter. Its South-east Asia research head Chua Chor Hoon said that with 'a limited amount of retail space' expected in that area in the next two years, rentals could 'trend gently upwards'.

Landlords of retail space in suburban malls had an easier time in Q2. Rents of prime first- storey space inched up by 0.3 per cent from a quarter ago to $33.60 psf pm, and those of upper-storey space rose 0.4 per cent to $22.90 psf pm.

Source: Business Times, 23 Jun 2010

Retail rents end on mixed note in Q2

Rental values for retail space across Singapore ended on a mixed note in the second quarter of this year.

That’s according to estimates by property consultancy DTZ Research.

The report found that retail rents at Orchard and Scotts Road stood unchanged for the second consecutive quarter, as the performance of retailers was mixed in light of new supply that came on-stream since last year.

Gross rents of prime first-storey space in the Orchard and Scotts Road area remained at S$39.70 per square foot per month while upper-storey retail space rents stayed at S$20.50 per square foot per month.

But gross rents in other city areas contracted – as more than 815,000 square feet of space was completed in the quarter in areas outside of Orchard and Scotts Road.

Most of the new supply came from The Shoppes at Marina Bay Sands.

Prime first-storey rents in other city areas fell marginally by 0.4 per cent in the second quarter compared with the previous three months to S$24.30 per square foot per month.

Meanwhile rents for upper-storey space dipped 0.7 per cent on-quarter to S$13.90 per square foot per month.

In contrast, rents in the suburban areas edged up in the quarter, with suburban malls performing better than the city malls.

Monthly gross rents of prime first-storey retail space in the suburban malls rose marginally by 0.3 per cent to S$33.60 per square foot per month.

Upper-storey rents in this category inched up 0.4 per cent on-quarter to S$22.90 per square foot per month.

Source: Channel News Asia, 22 Jun 2010

Stiff competition for Orchard Road latecomer

A proposed mixed-hotel-and- retail development on the site of the former Specialists’ Shopping Centre and Hotel Phoenix may face stiff competition, as it will be a latecomer in the revamped Orchard Road shopping strip, said industry players.

But experts also believe the new development will benefit from synergies with nearby shopping malls once the linkway, Discovery Walk, is complete.

Discovery Walk is a decked pedestrian mall which covers Stamford Canal and links the Specialist’s Shopping Centre/Hotel Phoenix site to the adjacent malls, Orchard Central and 313@Somerset. It will be fully complete with the redevelopment of Specialist’s Centre/Hotel Phoenix site, which is owned by OCBC Bank.

Mainboard-listed United Engineers (UE) announced on Monday that it won a $550 million contract to redevelop the site. Temporary Occupancy Permits are expected to be obtained by 2013.

Ms Sng Ngoi May, chairman of the Orchard Road Business Association, said competition is inevitable but views the new development as the missing piece of the puzzle.

“The three adjoining sites will enhance each others’ position. Right now, Discovery Walk is a blank wall till the centre clout is developed,” she said.

The redeveloped project includes a pedestrian bridge and underpass which will link the new development to the Great Eastern-owned Orchard Emerald site across the road.

But Ms Sng notes that cannibalisation is a real possibility if the supply of retail space falls short of retail spending. She said she hopes the integrated resorts and tourists from the redeveloped Hotel Phoenix will stoke demand for more retail space.

DTZ’s senior director of research Chua Chor Hoon said the 2013 estimated completion date could be an advantage.

“When they complete in 2013, they will be the only major shopping mall along Orchard road that is going to be launched,” she said.

Source: Today, 10 Jun 2010

Orchard Road ranked 27th most expensive retail street in world: survey

Singapore prime Orchard Road shopping belt has been ranked the 27th most expensive retail street in the world by property consultant Colliers International.

The city moved up one notch from the 28th spot last year in the Colliers annual global ranking of rents for prime retail space.

Colliers said prime retail space along Orchard Road is US$330.19 per square foot per year on average. This was up about 2 per cent over the last survey in 2009.

Colliers Director of Research and Advisory Tay Huey Ying said the gain is due to the weakening of the US dollar against the Singapore unit.

But in Singapore dollar terms, rents for prime retail space on Orchard Road fell 5.5 per cent on-year in the first quarter.

Elsewhere, Colliers said street front rents in almost every region of the world fell during the past 12 months for a second consecutive year.

Colliers said despite an improved global economic landscape, retailers were still expressing caution in terms of expanding and committing to new stores.

But it also noted that there is mounting evidence that the worst of the downturn is over and high-end retailers would be back pressing for more high profile stores.

In particular, it said two sub-categories – financial centres and tourism-dependent cities – were doing better relative to the previous year.

It said, with many of the world’s rich feeling more secure and comfortable with luxury purchases, demand for high-end retail premises is expected to increase over the coming year.

In addition, with the improving global economy and credit markets, retailers with a strong balance sheet are quickly gaining the confidence to expand into markets previously viewed as too expensive or difficult to penetrate.

Colliers said the emergence of a sizeable middle class in Asia Pacific, the Middle East and central and eastern Europe will likely continue, and these “aspirational” consumers will be a key source of growth for many luxury retailers.

The Colliers survey is published annually and tracks annual retail rents of the world’s prime retail corridors across 127 cities in North America, Europe, Middle East and Africa, Asia Pacific and Latin America.

Source: Channel News Asia, 8 Jun 2010

Marina Bay Link Mall phase one take-up rate at 80%

Marina Bay Link Mall said it has leased 80 per cent of the retail space for phase one of its development, while phase two has also seen healthy take-up at 66 per cent.

The mall which will open in November this year is expected to serve over 50,000 workers and residents in downtown Marina Bay.

More high-end homes like The Sail and Marina Bay Residences are being built in the downtown area, and Marina Bay Link Mall said its tenant mix will cater to these residents.

And among the tenants is the Four Season Market Place – a European-style market – which is making its debut in Singapore.

Apart from the residential developments, Marina Bay Link Mall said the new offices in the area will also help generate higher customer traffic.

“Firstly, One Raffles Quay and Marina Bay Financial Centre offer a daily catchment of over 60,000, not including the potential of a residential market for the first time in CBD – residences who will come from The Sail (and) the Marina Bay Residences. And of course, One Shenton in time to come, and more residential development within the CBD area,” said Rose Tong, director of Marketing, Retail, with Raffles Quay Asset Management.

Phase two of the development spans 82,000 square feet and it will open in mid 2012.

All in, the two phases of Marina Bay Link Mall will add 175,000 square feet of retail space in the downtown area.

But nearby City Link Mall said it is unlikely to pose a threat to its business.

The two underground malls are served by different MRT stations, namely City Hall and the Downtown station.

“I don’t see any cannibalisation between the two malls. They are at opposite ends of the Marina Bay, and they serve a distinctly separate set of customers,” said Robert L Garman, executive director of Hongkong Land.

Still, retailers like New Urban Male at City Link Mall expects slower sales initially when competitors at Marina Bay open in November, while Sakae Sushi hopes Marina Bay Link Mall will offer a good mix of stores to compliment its business.

To retain and attract new tenants, City Link Mall will undergo a significant renovation programme soon. It also plans to launch a range of promotions to draw customers there.

Meanwhile, the two underground malls expect retail rentals in the Marina Bay district to trend up.

According to Jones Lang LaSalle, the average prime retail rent stands at S$22.75 per square feet.

This could increase marginally by some 0.5 per cent by end 2010.

Source: Channel News Asia, 3 Jun 2010

S'pore moves up a rung in global retail rents ranking

Despite moderation in prime retail rents here, it's ranked 17th most expensive

PRIME retail rents in Singapore may have fallen marginally so far this year, but that has not stopped the city-state from moving up one place in CB Richard Ellis's latest survey of the world's most expensive retail locations.

According to the property firm's latest Global MarketView report on the retail sector, prime retail rents here were 17th most expensive in the world in the first quarter of this year, up from 18th in Q4 last year.

This was despite a moderation in prime retail rents here. According to the report, the average prime retail rent in Singapore at the end of Q1 this year was US$436 per sq ft per year, down slightly from US$444 at end-2009.

CBRE's director of retail services here, Letty Lee, said: 'Singapore has been successful in attracting a sizeable number of global brands and new-to-market concepts due to an abundant choice of prime pipeline supply in the Orchard Road and the Marina Bay areas. That in turn has put some pressure on prime retail rents.'

New York, Sydney, Hong Kong, London and Paris remained seated at the top of the table, keeping their positions as the top five most expensive retail markets.

A trend that came through in the report is that prime retail rents in the world's leading shopping destinations have stabilised in the majority of markets, and even grew in some major cities in Q1. This was despite a lack of retail sales growth in most markets.

CBRE's global chief economist Ray Torto said: 'Retailers still face uncertain trading conditions and continue to put pressure on landlords to offer incentive packages.

'However, market pressures have not stopped retailers from expanding, and demand for prime retail space remains strong in many markets.'

But while prime space appears to be in demand, secondary units worldwide are typically seeing higher vacancy rates, lower retailer demand and falling rents, CBRE said.

The firm's head of cross-border retail for Europe, Middle East & Africa, Peter Gold, said it is too early to tell the gap will narrow during 2010.

Among regions, Asia appears to be leading the recovery, with retail markets generally strengthening in Q1.

'Thus far, Asia is the only region of the world where economic growth is starting to feed through into retail sales increases, and this is now starting to impact real estate markets,' CBRE said.

In particular, a number of international retailers are looking to expand their footprint into cities like Singapore, Hong Kong, Beijing and Shanghai, it said.

Source: Business Times, 26 May 2010