Big players behind the glitziest icons

Source : Straits Times – 4 Jul 2009

TRADE is in free fall, corporate profits are under fire and investors are running for cover – yet one glance at Orchard Road shows foreign investment here is still robust.

The glitziest projects being built on the shopping strip all have roots elsewhere in the region: Hong Kong is behind Ion Orchard and Grand Park Orchard, Indonesia speaks for Mandarin Gallery, while Australia has 313@Somerset.

Ion, a project worth over $2 billion, illustrates the new alignment among developers and their willingness to splash out for fresh space on Singapore’s premier shopping strip.

Orchard Turn Developments, a joint venture between Singapore’s CapitaLand and Hong Kong’s Sun Hung Kai, bid $1.38 billion for a prime parcel of land and has spent $700 million building the 56-storey retail and residential complex.

Ion said it is 94 per cent leased ahead of its opening on July 21, and boasts 333 stores, including 10 double-storey flagships for some of the world’s biggest designer labels and fast-fashion chains.

It has dedicated a section of Basement3 to house ‘the best of Singapore brands’, including The Hour Glass, Osim, alldressedup and Charles & Keith, while a ‘jewellery street’ on Basement 2 will showcase local jewellers Lee Hwa, Goldheart and SK.

Down at Somerset, Australian developer Lend Lease has invested $900 million, having put in a record bid to build 313@Somerset over the Somerset MRT station. The eight-storey, 294,000 sq ft mall is 90 per cent leased and will open in the last week of November, just in time for the Christmas shopping season.

The mall will house a four-storey flagship store for American fast-fashion giant Forever 21 and a three-storey one for Spanish retailer Zara.

Development director of Lend Lease Retail Asia, Mr Michael Kenderes, said: ‘Singapore is one of the world’s major travel destinations and aviation hubs, and Orchard Road is one of the world’s leading retail precincts. The opportunity to acquire this site for an iconic retail development made very good business sense.

‘It was the right time to enter the market and 313@Somerset, along with Pitt Street Mall in the heart of Sydney’s Central Business District, will be global flagships for Lend Lease Retail.’

Two hotels at the corner of Orchard and Bideford roads are also planning upscale retail complexes opposite each other.

The Meritus Mandarin Hotel, part-owned by Indonesian tycoon Stephen Riady through Overseas Union Enterprises (OUE), has pumped in $250 million to revamp its Mandarin Gallery mall.

And the Grand Park Orchard is spending $80 million to create a new ‘fashion-themed hotel’ fronted by the Knightsbridge.

Slated to open this quarter, Mandarin Gallery is designed to cater to ‘young professionals who are well-travelled, discerning and highly affluent’ with brands like the Delsey Concept Store and Galliano.

Ms Patrina Tan, senior vice-president of retail, marketing and leasing at OUE, said: ‘We felt that there was a gap in the market which existing as well as upcoming malls were not catering to.

‘Other new malls along Orchard Road are generally larger and cater to a wider audience from mass to luxury. Mandarin Gallery is tailor-made to fit the specific needs of its target audience.’

Mr Allen Law, director of the Park Hotel Group, which owns the Grand Park Orchard, intends to make the hotel the group’s flagship property.

The group was established originally in Hong Kong in 1961 but moved its headquarters to Singapore in 2005 when it bought the Crown Prince Hotel.

Mr Law said: ‘Knightsbridge features flexible floor plans which can be customised to clients’ requests and provides double-volume facade frontages for retailers to showcase their brand labels.

‘Like its namesake in London, Knightsbridge in Orchard will be the new address for fashion and style.’

These foreign players say they are here for the long haul.

OUE’s Ms Tan told The Straits Times: ‘We have a long-term view on our investment in Mandarin Gallery and will look to continuously improve and grow its property value. There is definitely room to experiment with new brands.’