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

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 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

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

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

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

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

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

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

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