Category Archives: Shopping

Far East Plaza undergoing tough times

Far East Plaza, once a popular haunt for teenagers, seems to have fallen out of favour.

The Straits Times, which visited the mall several times over the past month, saw more than 10 stores on the first floor with their shutters down and displaying “For Lease” signs.

While the eateries on levels one, four and five were bustling during lunch hour, few customers ventured into the shops.

Tenants said business has slowed by as much as 50 per cent, compared to a decade ago.

“There are simply too many mega malls which have opened in the past five years, and it is the norm to see retail tenants change every two to three years,” said the mall’s centre manager, Mr Kenneth Lim.

For 33-year-old Far East Plaza, adapting to the competition will not be easy.

For a major revamp to be carried out, the majority of the strata-titled mall’s more than 500 individual owners will need to agree to it, which would be challenging, Mr Lim acknowledged.

The last major revamp was in 2005, when it spent $6.53 million to improve its floors, ceilings and external walkways.

Three years earlier, department store Metro vacated its 50,000 sq ft space on the first floor. It was replaced by Level One, a warren of shops selling apparel mainly targeted at teenagers.

Times have changed, said Ms Joanne Teo, 32, who has been working at Level One clothing store Red 2 for the past 13 years.

“When Level One opened, Ion and 313@somerset hadn’t opened yet. H&M, which also sells cheap clothes, also hadn’t come to Singapore,” she said, adding that footfall at Level One has fallen by 50 per cent over the years.

Another of Level One’s pioneer clothing stores, Code Red, may move to a suburban mall if business does not improve, said an owner, Madam Joanna Tie, 50.

Clothing shops on the other floors of the five-storey mall are not faring any better.

However, the nail and hair salons still enjoy a steady stream of customers.

Ms Kelly Chong, 36, part-owner of hair salon Queen’s Cut on the fifth floor, said her business relies on regulars, who make up 70 per cent of her customers.

Mr Charles Yue, 56, a property agent helping to lease out the mall’s units, said there are around 30 vacant units out of some 600 shops.

“They are usually vacant for three to six months,” he said. “Each lease is about two years, although cases where tenants want to break their lease before it is up have become more common.”

Mr Ong Kah Seng, director of property consultancy R’ST Research, estimates that rents, which are set by individual owners, have fallen by between 10 and 15 per cent over the past two to three years.

The mall could reposition itself as an incubator for budding entrepreneurs, he suggested. Vacant units can be sub-divided into smaller shops and offered rent-free for the first three months to young retailers with innovative products.

“If such an energising, new vibrant concept gets mass appeal and recognised, then it will earn accolades for the mall – as one which offers entry retailers a platform to successfully start their services,” he said.

Polytechnic student Yumi Ono, 23, said she used to shop at the mall a few years back, but now buys her clothes online.

“All these clothes can be found on blogshops. Why do I need to travel when I can buy online?” she said.

Still, there are tenants who are willing to stay because of the cheaper rental and flexibility, compared to developer-owned malls.

Madam Lilian Tan, who is in her 60s and helps out at her daughter’s clothing store on the third floor, said: “Those malls also dictate what time to open and close (a shop). Here, if we feel like opening, we open. If we don’t, we can keep the shop closed.”

Centrepoint plans major S$50m facelift

After a series of high-profile tenant departures in recent weeks, Centrepoint will be undergoing a S$50 million revamp, mall owners Frasers Centrepoint Malls announced on Thursday.

Scheduled to commence in May, the “asset enhancement initiative” was first conceived in 2014 and is expected to stretch over 16 months.

Major renovation works have been tabled for the basement and ground floors of the iconic 32-year-old mall, along with an integration of the main building with the basement annexe.

Additionally, the mall’s Orchard Road entrance will see a major revamp with a widened street frontage allowing passers-by direct access to both floors, along with greater shop visibility for retailers.

Centrepoint’s family-friendly offerings on Level 3 will continue to be at the forefront of its redesign considerations, said the mall, with new drop-off and pick-up points on the ground floor as well as stroller and wheelchair-friendly features built in throughout all floors for families with children and the elderly.

Beyond physical upgrades, the mall will also plug in a lineup of activities, events and promotions to bring new buzz to the revamped building.

The announcement comes amid a succession of pullouts by long-time tenants. Anchor tenant Robinsons vacated its space in May last year after 31 years. Marks & Spencer will close its outlet on March 29 to focus on other stores islandwide, said its owners, the Dubai-based Al-Futtaim group, which also owns Robinsons.

Elsewhere in the mall, Chinese restaurant Teochew City Seafood Restaurant shuttered last year after a 25-year stay while Cold Storage is scheduled to close on April 1 and electronics retailer Harvey Norman will pull out of its Level 3 space by May.

Replacing Marks and Spencer on Level 2 and Harvey Norman on Level 3 will be a “gourmet precinct and an expanded fashion zone”, said the mall.

According to Christopher Tang, chief executive of Frasers Centrepoint Commercial, a division of Frasers Centrepoint Limited, the initiative is part of “an ongoing strategic initiative” aimed at refreshing the malls within the group’s portfolio.

The mall’s over 60 existing tenants such as Starbucks, Gap and Metro will continue operations as usual during the renovation, he added.

The mall’s Orchard Road entrance will see a major revamp with a widened street frontage allowing passers-by direct access to both floors, along with greater visibility for retailers.

St Regis Residences penthouse sold at $15.8m loss

THE owner of a penthouse at St Regis Residences booked an eye-popping loss of $15.8 million when he sold the apartment last month. It is the biggest loss ever made on an apartment sale here.

The two-storey unit in Tanglin Road, with a swimming pool on the upper floor and views of Nassim Road’s greenery, first made headlines in 2007 when Japanese billionaire Katsumi Tada shelled out a record-smashing $28 million – or $4,653 per sq ft (psf) – for it.

Mr Tada’s generous offer back then gave the lucky seller a profit of $12.77 million, but it has turned out to be an astonishingly bad investment and underscores how fortunes have turned in the high-end property market, where more instances of loss-making transactions are surfacing.

The new owner is Andy Chua, who owns Yun Nam Hair Care. He snapped up the 6,017 sq ft apartment at the 173-unit project in a cash transaction of $12.2 million, or $2,028 psf, according to records lodged with the Singapore Land Authority.

The sale was executed in Tokyo and took just two weeks to complete, instead of the usual eight to 12 weeks, possibly due to the fact that it was a cash transaction.

Mr Tada is believed to have left the property vacant all this time.

Samuel Eyo, managing director of Singapore Christie’s Homes, reckons Mr Chua may have got a bargain given that the price was low for luxury projects in the area, which sell for between $2,500 and $3,000 psf.

Mr Tada is by no means the only high-end owner to get his fingers burnt lately, as luxury home values have dived 20 per cent from their peak in 2013.

A 2,626 sq ft unit at luxury condo The Coast at Sentosa Cove went for just $1,190 psf in January, booking a loss of $1.215 million for its seller.

Mr Tada, the 17th-richest man in Japan with a fortune of US$1.5 billion (S$2 billion) according to Forbes, is the president of Daisho Group – the firm which acquired The Westin Singapore hotel from BlackRock for $468 million in December 2013. That set another record at $1.5 million per hotel room key.

Mr Chua also made headlines last year when he paid US$2.2 million to score a private lunch with American investment magnate Warren Buffett.

Mr Eyo believes more bargains of the St Regis kind will emerge as interest rates rise. Affluent investors too are shopping around for a good deal.

“The ultra-rich would rather cash out of assets they have no use for, to invest in other assets that could rake in a profit larger than the loss,” added Mr Eyo. “To them, it’s just part and parcel of investing.”

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Singaporeans buy in-store more than online

Brick and mortar retailers still have the march on their online counterparts, going by a recent consumer survey.

The poll of 1,002 Singaporeans found that 56 per cent of respondents indicated that their most often-used method to buy non-food items is in-store.

And when asked to rate their favourite haunts, 85 per cent said they visited a physical store at least once a month, much more than the 49 per cent for online stores.

Shoppers were also likely to snap up bigger-ticket items in-store than online.

The survey by consultancy CBRE Group in August last year found that 83 per cent spent $51 to more than $500 per month at brick and mortar stores, compared with only 68 per cent that did so online.

A sizeable proportion of online shoppers (33 per cent) spent $50 or less per month, compared with 18 per cent for in-store shoppers. And it looks like the trend will continue – at least over the next two years.

Two-thirds of the respondents said they would not change their preference for shopping at a store over the next two years, with 21 per cent even intending to shop more at physical stores.

In fact, 29 per cent of respondents, aged 18 to 24 years old, said they would increase spending in stores over the next two years.

It was found that all households here owned at least one digital device, and that half of those surveyed used social media to keep up to date on special offers and new shops at malls.There is also cause for mall operators to cheer: 93 per cent said they headed to shopping centres to shop for non-food items.

What makes a shopping centre attractive? Rated “very important” were these three factors: Convenient to get to, cleanliness and security.

Glitzy Orchard losing some retail shine

The shine has come off the glitzy Orchard Road retail strip as shopowners report weaker results, owing to ever-popular heartland shopping centres, higher rents and pricey manpower.

Metro Holdings, which opened a new department store in The Centrepoint in the final quarter of last year, said a “disappointing level of sales resulted in losses being incurred by the new store”.

Department store operator Isetan (Singapore) had earlier reported a net loss of $3.1 million for the year ended Dec 31 on the back of higher rents and slower sales. Other than Isetan’s new store at Jurong East, other outlets registered lower sales for last year compared with 2013, “due to the challenging and competitive environment”.

Despite the gloom, there are still retailers that have something to cheer about. Robinsons The Heeren, which opened in November 2013, reported a 32.7 per cent growth in sales in January compared with a year earlier, while last month’s turnover expanded 33 per cent.Isetan’s Jurong East store helped lift group sales for the year to $340.3 million, an increase of 2.18 per cent compared with a year earlier. Courts Singapore has only one store in Orchard Road and so is less affected by higher rents, but its chief executive, Mr Terry O’Connor, said it is still a prevailing issue that could be addressed through more real estate zoning and proactive government action.

Retail experts call for retailers to find ways to use new technology to improve business and stay creative. Dr Wee said: “They should embrace technology in retail, adopt a blended approach and engage the right talent. They need to rethink the competencies needed in offline to online retailing. Consumer insights is key.

Luxury Mall Scotts Square looks to be too high-end for many tenants

Empty shopfronts dot the gleaming levels of Scotts Square. Despite its prime location in the Orchard Road retail belt and a line-up of high-end brands, the luxury boutique mall has seen an exodus of retailers as crowds stay away.

At least six stores have left the Wheelock Properties-owned mall since October, after completing their leases.

There were 10 empty shopfronts when The Straits Times visited yesterday. According to the mall’s online directory, 28 shops remain open.

Luxury watch retailer Sincere Fine Watches vacated its street-front space on the first and second floor last week, after three years at the mall.

Other recent departures include restaurants Ginza Sushi Ichi and Arossa Wine & Grill, which shut their doors on Jan 31. Urban apparel retailer Bread & Butter left last November, and Malaysian cafe Delicious the month before.

And this month, at least three more shops – fashion brands Anne Fontaine, Kiton and Marina Rinaldi – will exit the mall.

Sandwiched between Grand Hyatt Hotel and Tangs department store, Scotts Square on Scotts Road reopened in 2012 following the demolition and rebuilding of the old Scotts Shopping Centre.The three-storey mall, which has a basement with a FairPrice Finest supermarket, has 75,000 sq ft of space that can be rented, and is topped by a 43-storey six-star residence.

Some say the mall is feeling the pinch because it has gone too upmarket in an area where neighbours such as Ion pull in crowds through a blend of high-end and mid-range offerings.

Some of Scotts’ stalwarts, such as fashion brand Michael Kors, restaurant Wild Honey and shoe retailer On Pedder, continue to thrive, drawing on regulars and the strength of their brand.Unconventional newcomers such as pop-up concept space K+ and art gallery Red Square are also garnering attention.

Selegie malls up for Collective Centre again

Peace Centre and Peace Mansion on the fringe of the Orchard Road precinct are up for collective sale for the fourth time, after three failed attempts.

This time, the owners have set a guide price of $680 million, which works out to $1,125 per sq ft per plot ratio.

This is a slight increase from the $675 million guide price in 2011. In 2007, when the owners had first tried to make a sale, the indicative price was $470 million.

The strata-titled mixed development sits on a 76,617 sq ft site at the junction of Selegie Road and Sophia Road. It has about 55 years of lease remaining on a 99-year leasehold tenure.

Peace Centre is an office and retail space comprising two blocks that are seven storeys and 10 storeys high. Peace Mansion is a 22- storey residential tower with 86 units, including two penthouses.

The developer which purchases the plot can build a new project with a gross floor area of some 604,578 sq ft, or an approved gross plot ratio of 7.89.

Based on the current approved ratio of 60 per cent commercial use and 40 per cent residential use, there is no development charge payable.

Peace Centre could be refurbished into a modern shopping mall, and Peace Mansion converted to accommodate serviced apartments, subject to regulatory approval, said Ms Stella Hoh, executive director of investment services at Colliers International, which is handling the sale.

“The vicinity… is set to be transformed into a vibrant area with new developments and rejuvenation plans,” added Ms Hoh, noting the planned development of the Ophir-Rochor Corridor.

The District 9 property also sits near malls such as PoMo, Parklane Shopping Centre and Wilkie Edge, and enjoys a large catchment student population.

Colliers is marketing the property to local and international funds and developers.

The tender will close on Feb 11 next year.

Verge at Little India for sale

verge-shopping-mallverge-shopping-mallThe 6-storey shopping mall The Verge and its connecting block Chill @ The Verge are up for sale for between S$320 million and S$350 million, says real estate company JLL.

Shopping mall The Verge and its connecting block Chill @ The Verge located at the junction of Serangoon Road and Sungei Road are going up for sale, and the owners are expecting between S$320 million and S$350 million, real estate company JLL said in a news release on Tuesday (Dec 9).

The Verge comprises a 6-storey shopping mall with two basement levels while Chill @ The Verge is an 8-storey building made up of two levels of retail units and a 6-storey car park. The former is located on a “white” site, which means a variety of alternative uses can be considered.

“The Verge is the only commercial value-add opportunity currently on the market for sale. Timing is optimum for an asset refurbishment or re-positioning of The Verge and any works will coincide with the completion of significant infrastructure in the surrounding area in the near future,” said JLL Regional Director of Investments Anthony Barr.

JLL also said the shopping mall is expected to draw on the large local catchment of tourists, residents and office crowd upon completion of two new MRT stations – Rochor and Jalan Besar – which form part of the Downtown Line.

Submissions for the two properties are due on Jan 27, 2015, at 3pm, JLL said.

South Beach to open after 7 years

SINGAPORE’S largest mixed development will soon be ready for business after seven years of work and frustrating delays.

The 1.65 million sq ft South Beach project in Beach Road, opposite Raffles Hotel, will open in phases over the next 12 months.

Its first corporate tenant arrives early next year.

South Beach is an ambitious project with two towers – of 34 and 45 storeys – comprising an office block, luxury homes and a Philippe Starck-designed hotel.

The development will also have 37,000 sq ft of retail space.

The South Beach, as the hotel is called, will have 654 luxury rooms and direct links to the Suntec City Convention Centre and Esplanade MRT station. It opens its doors in April.

Despite a sluggish property market, the project’s office component has done well.

A third of the 500,000 sq ft of office space has been leased, while a further 50 per cent of leases are being firmed up now, said Mr Aloysius Lee, chief executive of the South Beach Consortium.

TMF Group, a multinational professional services firm, will take up 16,000 sq ft, while Rabobank will occupy about 30,000 sq ft at the North Tower office building.

“The South Beach team is currently in advanced negotiation with parties to take up another 10 per cent, and is confident of hitting 90 per cent occupancy by early 2015,” said Mr Lee.

There will be 190 residential units, ranging from 950 sq ft two-bedders to 6,500 sq ft five-bedroom penthouses with their own swimming pools.

The Non-Commissioned Officers Club building and three former army blocks, the site of Singapore’s first national service enlistment exercise in 1967, will be incorporated into the project to house a 29,000 sq ft private club and hotel facilities.

South Beach is being developed by City Developments (CDL) and Malaysia’s IOI Group.

The project was initially slated for completion in 2012, but was hit by delays.

The consortium that secured the 376,296 sq ft plot in 2007 had originally comprised Dubai World unit Istithmar, United States-based Elad Group and CDL, each holding a one-third stake. But the financial crisis in November 2008 led CDL to defer building plans, after which Elad and Istithmar both dropped out.

Preparations to market the project picked up after IOI Group entered the consortium in 2011. The project’s residential unit prices are still under wraps.

7th most expensive retail rents in Asia Pac: Orchard Road

Singapore remains an attractive destination for international brands and new labels to set up shop, despite steep rents and tough operating conditions, property consultancy Colliers International said on Tuesday.

Still, brick-and-mortar retailers are feeling the heat from the competition posed by e-commerce firms, rising costs, a tighter labour supply and shrinking profits, it added in a report on a study that had looked at 125 retail real estate markets in 50 countries.

Retail rents in Singapore were one of the 10 most expensive in Asia Pacific, coming in seventh place at US$348 per sq ft (psf) a year, the study found.

This was down a spot from its sixth place last year, when retail rents were steeper at US$355 psf a year.

Rents for retail space in Hong Kong’s Queen’s Road Central were the costliest in Asia Pacific and second most expensive in the world at US$2,073 psf.

Monthly gross rents in the prime shopping belt of Orchard Road were mostly unchanged in the past year at $36.25 psf, just slightly down from $36.38 a year ago.

“Despite the demand for space by new stores and food and beverage outlets, the retail environment is challenging due to rising costs, shrinking profits and a tight labour market,” said Ms Chia Siew Chuin, director of research and advisory at Colliers.

But more chains have made their way into Orchard Road the past year, opening shops such as Adolfo Dominguez, Etam, Cath Kidston and Cos.

Mr Simon Lo, executive director of resaerch and advisory, Asia, at Colliers, said that Asian retailers have been competing with the increasing popularity of online firms. But top-tier brands will remain in core city areas, where the supply of new retail space is limited in cities like Seoul and Singapore. This will result in the mid-range labels moving out to decentralised areas, he said.

In Singapore, more suburban malls are expected to open their doors to shoppers over the next year. This includes Waterway Point in Punggol, which has an estimated net lettable area (NLA) of 344,370 sq ft, and Big Box in Jurong East, with an NLA of 260,000 sq ft.

Monthly gross rents for prime retail space on the ground floor in city-fringe malls were $24.35 psf as at Sept 30, up from $23.39 psf a year ago. In the suburban regional centres, monthly rents were $33.72 psf, up a touch from $33.46 a year ago.

“Malls in Orchard Road are facing increased competition from malls in other districts including those in the suburban and regional areas, which enjoy a captive and ready shopper catchment,” said Ms Chia. “These malls have proven to be resilient in performance, largely due to this advantage and their close proximity to MRT stations.

Worldwide, New York’s Fifth Avenue has the most expensive rents at US$3,550 psf each year. Hong Kong’s Canton Road was in third place at US$2,011 psf per year.

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