More malls than shoppers?

Source : Sunday Times - 15 Mar 2009

To outdo the competition, new malls are churning out fresh ideas such as concept dining and eco-friendly themes

Seven new malls will spring up all over Singapore, from Tampines to Orchard Road, this year and next. They will add more than 5 million sq ft of retail space - the equivalent of five VivoCity malls.

Will upcoming 313@Somerset’s concept dining at Discovery Walk, with its mix of restaurants, cafes and bars, be a hit? — PHOTOS: LENDLEASE, ASIAMALLS ANAGEMENT, JACK INVESTMENT, FAR EAST ORGANIZATION, CDL, FAR EAST ORGANIZATION, CDI, MANDARIN GALLERY, ORCHARD TURN DEVELOPMENTS, PARAGON

Singapore’s nation of shopaholics would normally rise to the challenge, and then some. But now the call of the mall is muted for many, as the economic slowdown makes shoppers count every penny. The number of tourists has also been falling.

But the new malls are coming up with ways to wow customers. Retailers and developers are wooing shoppers with attractions ranging from brand-name duplex boutiques and new concept stores to rooftop- garden dining and eco-friendly themes.

Over at Tampines 1, which opens next month, there will be a valet service, for example. It will also probably be the first suburban mall to feature double-storey duplexes that will house fashion brands Topman and Esprit, and eateries such as Sushi Tei.

With its $45-million revamp, Paragon is all spruced up with an eye-catching 3-D facade, multiple pop-out glass panels and multi-faceted aluminium panels.

Other upcoming malls outside the Orchard belt are Iluma at Bugis, Marina Sands’ Marina Bay Shoppes and City Square Mall at Kitchener Road.

Orchard Road alone will see 1.7 million sq ft of new retail space, according to the Orchard Road Business Association (Orba).

The three ‘biggies’ opening this year are Ion Orchard at Orchard Turn, Orchard Central and 313@Somerset.

The retail space figure includes Mandarin Gallery at Meritus Mandarin Singapore, now undergoing an expansion.

Each mall is keen to stand out. A spokesman for Mandarin Gallery, for example, says: ‘The Gallery has an intimate size and is focused on its core customer base of the affluent and well-travelled.’

She notes that ‘the larger malls, spanning 200,000 to 660,000 sq ft, cater to the masses’.

Mid-priced mall Orchard Central near Somerset MRT Station is going big on food when it opens in the middle of the year. It will be the first new mall to be built from scratch in Orchard Road since The Heeren Shops opened in 1996, says Orba.

Twenty-one of the 116 tenants it has so far signed on are food and beverage outlets. Its 24-hour rooftop garden with a street view of Orchard Road will have two eateries including the Nuoc Vietnamese restaurant.

Despite the recession, Mr Ashok Melwani, managing director of Unos, the firm that runs Nuoc, is confident his ‘mid- priced menu and good food in an alfresco setting’ will appeal to families.

But these malls could open with empty units. Mandarin Gallery, which will open in the last quarter of this year, has secured 70 per cent occupancy.

A spokesman for Orchard Central says the mall is 65 per cent leased. Ion Orchard, which will open by mid-year, declined to reveal details.

Mr Michael Kenderes, development director of Lend Lease Retail, which is building 313@Somerset, says: ‘We are facing one of the most challenging retail business environments. But there is still a demand for premium sustainable retail centres that offer a strong return.’ 313@Somerset, which opens in November, is more than 65 per cent leased.

Also optimistic is luxury fashion chain Club 21. Its upcoming flagship stores at Ion Orchard include Giorgio Armani and Marc Jacobs, and Marc by Marc Jacobs and Emporio Armani at Mandarin Gallery.

Its spokesman says: ‘Our business strategy includes the expansion of fast-growing brands. The prominent streetfront positioning will give us a stronger competitive advantage.’

Depending on location and store unit, says Mr Danny Yeo, deputy managing director of Knight Frank, average monthly retail rental would have held steady or fallen by 5 to 15 per cent compared to six months ago. It now ranges from $15 to $40 psf.

Ms Letty Lee, director of retail services at CB Richard Ellis, says retailers need to develop schemes to attract local dollar, such as absorbing GST and giving out cash vouchers.

One such mall is The Heeren Shops. Marketing director C.S. Low says the mall is running a Eat, Shop N’ Save campaign to encourage sales. For every $28 spent, shoppers get a $10 cash voucher.

Despite the weak consumer sentiment, many shoppers are looking forward to the new malls. Graphic designer Sharon Lim-Ho, 32, says: ‘With the new malls, I will visit Orchard Road more frequently. But I will spend on items that I need or buy a dress instead of two from a new label.’