Escalators to make way for retail space at Wisma

Source : Straits Times - 3 Feb 2009

WISMA Atria shopping centre is preparing to convert space currently taken up by temporary escalators into new stores - a move which could rake in nearly $500,000 a year in additional rent.

This is being made possible with the scheduled reopening of a crucial underground walkway between Orchard MRT station and Wisma Atria’s basement due in the second quarter of this year.

The escalators had been installed in December 2006 to help customers get to the basement after the temporary closure of the link for the construction of Orchard Turn development Ion Orchard.

Now, Starhill Global Real Estate Investment Trust, which has a 74 per cent stake in Wisma Atria, said it hopes to rake in $453,000 more in rental income a year from the new space. In a statement announcing its full year results last Friday, Starhill said the escalators’ removal will free up a total of 1,238 sq ft of retail space on the mall’s first and basement levels.

American casual wear giant Gap, which already occupies almost 8,000 sq ft on Level 1, will expand to take up the 474 sq ft of freed escalator space at an expected $19 per sq ft per month, said Starhill.

Another yet-to-be-decided store will occupy the 764 sq ft in the basement, at an expected gross rent of $50 per sq ft.

In the first two weeks after the September 2006 closure of the walkway, shopper traffic reportedly fell by 20 to 40 per cent.

Although the installation of new escalators had immediately resulted in a ‘quick recovery in traffic flow’, said Starhill, the impending reopening of the walkway will take away the need for them.

Wisma Atria plans to complete the three-month reconfiguration in October to capitalise on the expected shopper traffic jump from 15.8 million to 25 million a year. The adjacent new mall, Ion Orchard, is slated to open in June.

Starhill admitted that slowing sales will put pressure on rents, and that rents for prime Orchard Road retail spaces could fall by as much as 13 per cent this year.

However, Starhill said that as a group with overseas assets, it expects continued growth over the next few years. In particular, rents from Toshin Development, which occupies 89 per cent of net lettable area in its other Orchard Road property, Ngee Ann City, increased by 19.75 per cent over the three years ended June 2008.