The Far East Shopping Center on Orchard Road in Singapore, on Thursday, April 11, 2024.
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The Far East Shopping Center along Singapore’s Orchard Road has seen better days.
Despite being five minutes’ walk from the Orchard MRT station, one of Singapore’s busiest subway stations, the 42-year-old mall suffers from very poor footfall. Around one-fifth of the units are vacant and up for sale or rent, and the occupants are more likely to be maid agencies rather than the high-end stores or restaurants associated with a prime shopping district.
This same feeling of emptiness pervades many of the older malls along the upper stretch of Orchard Road, which extends from the posh Tanglin residential area near the Singapore Botanic Gardens to where the Orchard MRT is located.
Orchard Road, Singapore’s main shopping street, is 2.2 km (1.3 miles) long but much of the activity takes place in the middle of the stretch as well as at selected malls linked via underground walkways to subway stations. Far East Shopping Center isn’t connected to Orchard MRT unlike several of its neighbors.
This situation could be about to change, however. Many of the older properties along Orchard Road’s periphery are expected to be redeveloped in the coming years following a slew of financial incentives from the Urban Redevelopment Authority (URA), Singapore’s land planning agency. But the investments required will still be significant, likely running into the billions of dollars due to the high cost of land and construction in Singapore.
New investments
At the Tanglin section of Orchard Road, Hotel Properties Ltd (HPL), controlled by billionaire Ong Beng Seng, last year obtained approval to knock down three of its properties and build a massive 114,150 square-meter mixed-use development with a hotel and residential units across two tower buildings as well as retail and office space.
Two of the properties, the voco Orchard hotel and Forum The Shopping Mall, share some 180 meters of frontage along Orchard Road. The Forum alone was valued at 948 million Singapore dollars ($705.9 million) last year.
The redevelopment hasn’t started, however.
City Developments Ltd (CDL), one of Singapore’s largest listed developers, earlier this year bought out the remaining owners of Delfi Orchard, a 40-year-old, 11-story retail and residential building, in a deal that valued the property at 439 million Singapore dollars.
Analysts expect CDL to redevelop Delfi Orchard with the nearby Orchard Hotel and adjoining mall held by CDL Hospitality Trusts, a real estate investment trust which CDL manages.
Arts, cultural and lifestyle offerings
“The Tanglin area is envisioned to be a mixed-use neighborhood with a strong arts and artisanal flavor. Locals and tourists can look forward to enhanced arts, cultural and lifestyle offerings when building owners redevelop and offer new uses to cater to evolving needs and preferences of visitors,” Singapore’s URA said in a written response to queries from CNBC.
The Orchard Road area in Singapore, on Monday, July 8, 2024. The Orchard Road shopping strip is a global hub for tourism and high-end retail that’s boomed along with the nation’s rise, reshaping a swath of nutmeg plantations and pepper farms first cultivated over a century ago.
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Beginning 2025, URA will start work on a series of enhancements to the entire Orchard Road area, which include a 6-kilometer-long “green connection” linking the Singapore Botanic Gardens to Istana Park and Fort Canning Park located near the other end of Orchard Road.
Richard Goh, executive director of Pacific Eagle Real Estate, said the Tanglin section of Orchard Road can be made more attractive with covered walkways and “experiential spaces that go beyond traditional retail and F&B [food and beverage].”
He recalled a time when the Tanglin area was popular with shoppers, citing attractions such as the old Rasa Singapura Food Center, which housed many of Singapore’s most popular hawker stalls. Rasa Singapura was closed in 1989 to make way for new developments.
Pacific Eagle, a Singapore-based real estate investor that is privately held by the family of Indonesian billionaire Sukanto Tanoto, is redeveloping Tanglin Shopping Center, which it acquired for 868 million Singapore dollars in 2022.
Challenges
One challenge facing URA and private sector developers keen to redevelop the upper stretch of Orchard Road is the ownership structure of many older commercial buildings. Instead of coming under a single holding company, these properties are divided into tiny strata units held by different owners.
Putting up such properties for sale requires support from at least 80% of strata owners who must also agree on a minimum asking price before a collective sale can be launched.
Another speed bump involves negotiating with URA for concessions under the latter’s Strategic Development Incentive Scheme, which is aimed at getting landlords to redevelop adjoining older properties primarily in the central business district and Orchard Road areas.
URA said it is keen on new developments that will inject new lifestyle or retail offerings, plug gaps in the planned pedestrian networks, or improve access to public areas like parks and waterways.
Earlier this year, the collective sale of Far East Shopping Center to an investment firm linked to Chinese tycoon Du Shuanghua was called off after the buyer reportedly failed to get URA approval for an increase the new development’s gross floor area.
“If URA wants to speed up the pace of redevelopment along Orchard Road, some tweaks to the programs will be required,” said Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore.
Savills, which brokered the collective sale of Tanglin Shopping Center and Delfi Orchard, recently arranged the sale of Concorde Hotel, an old property at the other end of Orchard Road to HPL for 821 million Singapore dollars.
Beating the heat
Tina Qiu, director of PLP Architecture, suggested constructing sheltered walkways along the Tanglin stretch to protect pedestrians from Singapore’s relentless heat, humidity, and frequent rain showers.
The Impact of Global Warming on Street Conditions
As global warming continues to be a pressing issue, the conditions at street level are expected to deteriorate over time. In response to this challenge, innovative solutions are being proposed to create more comfortable and sustainable urban environments.
Incorporating Animated Canopies and Retractable Umbrellas
One proposed solution is to create more shelter along pedestrian routes using animated canopies and retractable umbrellas. These structures can be activated during high sun to provide shade and protection from the elements, and retracted during the night to allow natural lighting to illuminate the streetscape. This innovative approach not only enhances the pedestrian experience but also contributes to energy efficiency and sustainability.
Advantages of Air-Conditioned Malls
Qiu, a London-based architect with projects in Singapore, highlights the advantages of malls connected to Orchard MRT over those in the Tanglin area. The ability to move seamlessly between different locations in a cool, air-conditioned environment provides a distinct advantage, especially in the face of rising temperatures and harsh weather conditions. By prioritizing comfort and convenience, these indoor spaces offer a respite from the heat and humidity, attracting more visitors and creating a vibrant retail and social hub.
Creating Comfortable and Regulated Interior Environments
In places like Singapore, where extreme heat and humidity are common, creating comfortable spaces for people to gather and interact is essential. By focusing on regulated interior environments, such as air-conditioned malls and public spaces, designers and urban planners can ensure that people have access to comfortable and enjoyable spaces. This not only enhances the quality of life for residents and visitors but also contributes to the overall sustainability and resilience of the urban landscape.
In conclusion, addressing the challenges posed by global warming requires innovative solutions that prioritize comfort, sustainability, and resilience. By incorporating creative design elements and leveraging existing infrastructure, cities can adapt to changing climate conditions and create more livable and enjoyable urban environments for all.
