Orchard mall gets $4-5m ad blitz

Source : Business Times - 9 Apr 2009

Far East Organization will spend $4-5 million from June to December this year promoting its upcoming Orchard Central mall, which is set for a soft opening in early June.

But tenants will not get across-the-board base rent rebates - unlike at upcoming rival Ion Orchard. Susan Leng, Far East Organization’s director for retail management, said the company is working with tenants on a case-by-case basis and has offered rebates to a ‘handful’ so far.

According to her, Orchard Central will be a must-visit shopping destination. ‘Our extensive advertising and promotional (A&P) campaign over the second half of the year aims to attract shoppers to Orchard Central to experience a whole new level of retail and dining,’ she said.

The $4-5 million A&P budget is the largest that Far East Organization has set aside to promote a mall - and more than twice the amount it has spent promoting other malls it launched lately. The A&P campaign is expected to drive tenants’ sales, which is why the mall - even though it has a rent assistance programme in place - is not giving a standard rebate to all tenants.

‘Our key focus is not on rent assistance but bringing up sales,’ Ms Leng said. ‘But we review (each case) and if the case is valid, we consider rebates.’

So far, Orchard Central has received written submissions from 17 tenants asking for rent rebates and has granted rebates of 10-30 per cent to ‘less than 10′ of them, she said. The rebates will be valid until October. Last month, Ion Orchard - which is at the opposite end of Orchard Road and is due to open in July - said tenants will get rebates of up to 30 per cent of base rent.

Orchard Central has been 65 per cent taken up so far. Negotiations are still going on with several retailers, and Ms Leng is optimistic the take-up rate will increase to 75 per cent over the next few months. Signing-on rents have softened over the past few months, she said. Separately, shopping mall Tampines 1 will open its doors to the public today with 100 per cent occupancy.