The great Orchard Road makeover
EdgeProp Singapore |
The plan to make over Orchard Road, Singapore’s most famous shopping strip, started in January. URA, Singapore Tourism Board (STB) and National Parks Board (NParks) came together with the Land Transport Authority (LTA) to unveil a two-pronged strategy to make Orchard Road “The Lifestyle Destination” and to “Bring Back the Orchard”.
To bring vibrancy to Orchard Road and further improve consumers’ shopping experience, the Orchard Road Business Association will start a one-year trial from this month, incorporating experiential activities to enliven spaces along the pedestrian mall. Walking tours of Orchard Road were also introduced from February.
To be sure, Orchard Road has come a long way. It was built upon a valley where a river flowed. “Orchard Road is really just a longkang [drain],” quips architectural historian Dr Lai Chee Kien as he leads a walking tour of the famed shopping haven. “It’s at the lowest point of the hilly areas, and runs parallel to Bukit Timah Road.”
Design Orchard is the home to homegrown labels with a diverse offering of 61 local brands (Credit: Samuel Isaac Chua/ The Edge Singapore)
In the early 1800s, the area was occupied by fruit and nutmeg orchards. Over decades of development, the original physical terrain was flattened out, leaving no trace of these plantations. Emerald Hill, for instance, was the site of a former nutmeg orchard, and grew into a residential neighbourhood of at least 112 houses by the 1930s.
In 1958, Orchard Road’s first department store, Tangs, was set up by local merchant CK Tang. New malls then sprang up one after another, and they have evolved into today’s Far East Plaza, Ngee Ann City, The Heeren, Orchard Central, and Plaza Singapura.
When the iconic Ion Orchard first opened its doors to throngs of shoppers in July 2009, it marked the peak of the premier shopping belt’s “golden era”, remarks Lai. Now, with changing trends, the glitzy malls along Orchard Road may be slowly losing their lustre as consumers constantly find themselves thirsty for more.
“The biggest challenge faced by Orchard Road malls is that they are all starting to look the same, offering similar brands and experiences,” says Sulian Tan-Wijaya, executive director of retail & lifestyle at Savills Singapore. “Changes in Orchard Road need to come from within. Each mall should create its own unique identity, tenant mix and experiences. Otherwise, shoppers would rather shop online, in the suburbs or other cities like Bangkok and Tokyo.”
Tan-Wijaya points to Terminal 21, a shopping mall in Bangkok, as an example of a mall that has created its own identity. Themed as an international airport, the mall has a metal detector that customers have to step through when they enter, which is akin to the pre-flight security screening process. Each level is decorated based on well-known streets in cities such as Tokyo, Istanbul, London and Rome. Even the washrooms are not exempt from this attention to detail.
The glass cone exterior of Wheelock Place was designed by Japanese architect Kisho Kurokawa (Credit: Samuel Isaac Chua/ The Edge Singapore)
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Revitalising Orchard Road
In March, the URA unveiled key proposals focusing on a more inclusive, sustainable, and resilient city under the Draft Master Plan 2019. The Orchard Road shopping belt was divided into four sub-precincts, namely Tanglin, Orchard, Somerset, and Dhoby Ghaut.
Tanglin’s identity as an arts and cultural neighbourhood will be strengthened. Conserved in 2005, Tudor Court, which was built in the 1920s to serve as quarters for civil servants, is under consideration to house more arts, cultural, and lifestyle offerings.
At Orchard, vibrancy is the key to further improve consumers’ shopping experience, as Orchard is the retail haven of Singapore, boasting myriad shopping malls and retail outlets.
Somerset, known as the youth hub, houses the newly-opened, 2½-storey Design Orchard, located at the intersection of Orchard Road and Cairnhill Road. A joint venture by JTC, Spring Singapore and Singapore Tourism Board, Design Orchard is the home to homegrown labels with a diverse offering of 61 local brands. By marrying design and technology, Design Orchard wants to prove that it is more than just a retail space. Smart mirrors help shoppers find out more about the products offered in homegrown retailer Naiise’s 9,000 sq ft retail showcase on the first floor. On the second floor is an incubation space operated by the Textile and Fashion Federation Singapore. The rooftop, which holds an amphitheatre, doubles up as an event space.
Dhoby Ghaut, where many of the early activities of Orchard Road took place, is envisaged as a family-friendly lifestyle zone. Apart from being enhanced as a lifestyle destination, Orchard Road will also be a green corridor that connects to the Singapore Botanic Gardens and Fort Canning Park.
The Heeren was first named Heeren Building after Melaka’s Heeren Street, with heeren being Dutch for “gentlemen” (Credit: Samuel Isaac Chua/ The Edge Singapore)
Changing retail trends
Orchard Road’s vacancy rate saw a peak of 9.2% in 2Q2016, when there was an exodus of major retail brands from the shopping street, says Tricia Song, head of research for Singapore at Colliers International. The vacancy rate has fallen to 5.2% by end-2018, adds Desmond Sim, CBRE’s head of research, Singapore and Southeast Asia. In fact, ground-floor rents at Orchard Road rose by 1.4% y-o-y to $41.20 psf per month in 2H2018, based on research by Colliers.
Three trends have impacted the retail scene in Orchard Road. First, new retail concept stores have entered the popular shopping belt such as Japanese discount chain Don Don Donki, which sells everything from food and apparel to stationery and skincare. “The introduction of Don Don Donki created a hype over Japanese products and offerings in Orchard Central and became the talk of the town with queues snaking around the mall,” comments Christine Li, head of research at Cushman & Wakefield, Singapore. The chain has since opened two more outlets: one at 100AM Mall in Tanjong Pagar, and its largest store spanning 26,000 sq ft in City Square Mall.
The Apple Store, at the heart of Orchard Road, also has a unique retail concept. Apple focuses on curating the community and experience of visitors once they enter the store, rather than marketing it as a conventional storefront. “We want to be more like a town square,” said Angela Ahrendts, Apple’s senior vice president of retail, at Fortune’s Most Powerful Women Summit in 2016. This is evident in the layout of the tech giant’s first store in Southeast Asia. Apple’s core products are on display on the first floor; on the second floor, there are communal spaces with ample seats, where customers can speak to tech support staff or attend talks and workshops.
Second, there has been a rise in F&B tenants along Orchard Road. “New F&B players have been keeping up with market demands by providing more diversity and catering to market preference,” says CBRE’s Sim. “Aside from crowd favourites such as Japanese cuisine, the past year has seen the launch of restaurants offering Chinese cuisine to cater to Chinese locals and tourists. These include Paradise Dynasty at Wisma Atria and Le Shrimp Ramen at Paragon.”
Third, e-commerce has caused retailers to adapt. An effect of that is omni-channel retailing, where shops own both online and physical presence. “Online sellers also want to go brick-and-mortar to offer customer service and personalised experience for their products and services,” says Colliers’ Song. Women’s fashion brand Love, Bonito started off as a boutique blogshop in 2005, and gradually expanded to include brick-and-mortar stores. Its first store was at 313 Somerset in late 2017, and it opened another in JEM in 2018, Song notes. To date, the fashion brand has store presence in five malls in West Malaysia, eight in Indonesia, and two in Phnom Penh, Cambodia.
The iconic Ion Orchard first opened its doors to shoppers on July 21, 2009 (Credit: Samuel Isaac Chua/ The Edge Singapore)
“As more retailers embrace omni-channelling, it will be imperative for landlords to evolve with this transformation,” says Letty Lee, executive director of retail services at CBRE. For instance, landlords could allocate areas for distribution and parcel collection points.
Despite competition from e-commerce sites, Song believes more than 90% of retail sales will still take place in physical stores. She is backed up by statistics: online retail sales contributed only 5.5% to total retail sales value in Singapore for December 2018, based on data provided by the Department of Statistics.
For the rest of 2019, Cushman & Wakefield’s Li expects tourist arrivals to be boosted by the increased capacity of Terminal 1 and Terminal 4, as well as the opening of Jewel Changi Airport this month. This would in turn lift prime retail rents at Orchard Road, resulting in a “slight uptick around 1%”.
Focus on experiential retail
K Bowling Club at 313 Somerset (Credit: Samuel Isaac Chua/ The Edge Singapore)
Underpinning the three trends is a focus on experiential retail. Brick-and-mortar stores provide an experience that online shopping will never be able to replace. “You can never smell a scent or taste a flavour online, or accurately determine whether a certain cut or size will suit your body shape,” says CBRE’s Sim. “Almost all retail businesses require some form of physical presence: jewellery and watches, fashion, beauty and wellness, F&B, among others.”
To that end, luxury brands will never lose the appeal of having a brick-and-mortar counterpart. As owning these brands is a sign of one’s social status, shoppers would want to be seen purchasing the luxury goods. “The Gucci store at Paragon is a visual treat and every section is designed differently as if you’re walking through a fairy-tale mansion,” says Sim. “Making a bespoke suit or pair of customised shoes is a buying experience you cannot get online.”
This also calls for more creative ways to attract customers. “A number of cafés are doubling up as casual co-working spaces, by providing free Wi-Fi and power outlets for customers to do work during the non-peak hours,” says Colliers’ Song. At Wonderland Savour, a European restaurant in Wisma Atria, themed after Alice in Wonderland, “you can munch on macarons or sip champagne while browsing your favourite vinyls”, says Savills’ Tan-Wijaya.
Artwork by Chong Fah Cheong titled Budak-Budak (“Children” in Malay) installed in front of The Heeren, which symbolises the wisdom and culture that are passed down over generations (Credit: Samuel Isaac Chua/ The Edge Singapore)
Landlords have also focused on leasing out to more activity-based retailers. The five-storey 313 Somerset has a K Bowling Club boasting an all-in-one bowling alley with a bar, darts area, arcade, pool tables and KTV booths. On the fifth floor next to Food Republic is Fat Cat Arcade, which offers a range of retro arcade games such as claw machines. This is its second outlet, with its first space at Djitsun Mall in Bedok. In Takashimaya at Ngee Ann City, ABC Cooking Studio offers cooking courses, with a selection of menus, timing and instructors to choose from.
Events and workshops are key to drawing in customers. “Synchronised promotion of events will generate greater hype and a critical mass of interest to draw the crowds to the storefronts,” says Colliers’ Song. Ideally, it would be a partnership among the entire precinct or shopping mall, creating a compelling space and curating “Instagrammable” experiences to attract social media interest, which would generate hype, she adds.
The bronze Nutmeg and Mace sculpture sits right in front of Ion Orchard, which serves as a reminder of Orchard’s past (Credit: Samuel Isaac Chua/ The Edge Singapore)
Ultimately, these moves to rejuvenate Orchard Road are good, as they have an uplifting effect on the entire “mood, look and feel” of the area, says Tan-Wijaya. “You can literally walk from one end to the other, and all the segregation [into different sub-precincts] is to make it a very interesting street to walk down,” she continues.
However, Tan-Wijaya feels that equal importance has to be given to “what’s in the malls” – the retailers. She adds: “Otherwise, it’s just going to be a very fun street to walk down, with nobody holding any shopping bags, and then the malls are going to die. That is my fear.”
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