In Singapore’s iconic Orchard Road retail street, a new era is starting

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.

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.

“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…