Tuesday, March 14, 2006

One shop too many?

A local property company, in a joint venture with a Hong Kong property heavy-weight, is going to develop a shopping centre cum condo along Singapore's Orchard Road (called the Orchard Turn) by 2008. The land alone costs S$1.38b, so it is going to be a very very expensive development indeed. The eventual tenants of this development can also expect about S$2000 psf, which will result in very very high rentals. But this is inevitable for the developers to recoup their investments in an acceptable time-frame. The developers think that they can get certain retailers now not represented in the current retail scene to take up the floor space, and thus make this a retail destination that is truly unique. (Reported in Today, 14 March 2006).

Shop till you dropGreat plans, huge prices, sanctioned by the government, no less. But somehow, I am sceptical that it will make a real difference to the retail scene at all. Plaza Singapura was renovated recently. Its a huge shopping centre, but it has nothing revolutionary to offer, though I must admit that I shop there more often. What the new development will do is to take away one of the remaining spots along Orchard Road that still 'houses' a green park where the air is fresher and people can meet without the distractions of shops and promotions that are a usual feature in any shopping centre. Yes, this may liven up the retail scene, but do we really need another shopping centre with air-conditioned air? Tang's hasn't been doing all that well in recent times and its just across the road. To think that a new development on the other side of the road will do better in the long run is being a tad over-optimistic.

My complaint is that there are too many shopping centres in Singapore already. One more won't make a significant difference. It may provide more choice, but in tiny old Singapore, that is likely to be at the expense of another shopping destination on the island. Of course there is the tourist dollar that they are gunning for, but there will be competition from the IR at Marina Bay and Sentosa to contend with in the long run.

Yet, some experienced property developers must have done their Math and are sinking huge amounts of their own money into this, so what do I know?

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