Revitalization Plans for Singapore’s Orchard Road Face Challenges

The Far East Shopping Center, nestled along Singapore’s renowned Orchard Road, is experiencing declining foot traffic and vacant units despite its proximity to the bustling Orchard MRT Station. This 42-year-old mall, once a part of the thriving commercial hub, now houses more maid agencies than high-end boutiques that characteristically define the area.

Challenges extend to other older shopping complexes along the upper stretch of Orchard Road, notably those near the Tanglin residential zone, which borders the Singapore Botanic Gardens. This iconic 2.2-kilometer shopping haven has seen most activity focused in its central portion and those parts directly accessible by underground walkways extending from MRT stations.

Officials hope change is on the horizon due to policy initiatives from Singapore’s Urban Redevelopment Authority (URA). These proposals hint at a comprehensive redevelopment effort could be realized, fueled by financial incentives aimed at enhancing the older periphery of Orchard’s lively scene. However, such transformations are projected to demand billions in investments, largely because of exorbitant land and construction costs within Singapore.

Among the significant developments, Hotel Properties Ltd (HPL) secured approval last year to demolish three sites, including voco Orchard hotel and Forum The Shopping Mall, to erect a new mixed-use complex encompassing residential towers and retail and office capacities. The Forum alone was appraised at 948 million Singapore dollars in 2023, though this redevelopment initiative has yet to commence.

City Developments Ltd (CDL), another key player, earlier acquired Delfi Orchard, an aging retail and residential property, valued at 439 million Singapore dollars. Their future projects, including adjacent developments with CDL Hospitality Trusts, aim to reinvigorate the area with fresh arts and lifestyle offerings, according to statements from the URA prepared for CNBC.

Enhancements to Orchard Road, set to begin in 2025, will introduce a «green connection» that stretches six kilometers to link the Singapore Botanic Gardens to Istana Park and Fort Canning Park. Advocates like Richard Goh of Pacific Eagle Real Estate propose adding covered walkways and creating spaces that transcend traditional retail, aiming to reignite Tanglin’s past vibrancy and consumer appeal.

Nevertheless, substantial obstacles persist, primarily stemming from the fragmented ownership of commercial properties along Orchard Road. These buildings, often divided into small strata units, require a unanimous agreement on sale terms, frequently delaying potential redevelopments.

Moreover, managing the negotiations with the URA to yield concessions under the Strategic Development Incentive Scheme is another layer of complexity developers face. This program seeks to encourage comprehensive redevelopments, especially in Singapore’s central business and shopping districts.

Recent examples include the halted sale of the Far East Shopping Center, initially poised for acquisition by a company related to Chinese magnate Du Shuanghua, underscoring the uncertainty inherent in these large-scale redevelopment endeavors.

Experts such as Jeremy Lake from Savills Singapore, the brokerage behind Tanglin Shopping Center’s sale, suggest that policy adjustments may be needed to accelerate Orchard Road’s redevelopment. Proposals include constructing sheltered pedestrian walkways to boost comfort against Singapore’s oppressive climate, an idea supported by Tina Qiu of PLP Architecture, highlighting the need for environments that offer refuge from heat and humidity.

As the Orchard Road area adapts to new economic currents and shifting consumer preferences, the blend of private investments and strategic urban planning will be crucial in revitalizing this iconic shopping corridor.