Singapore: Orchard retail going underground, who stands to gain?

September 20, 2012 / By  

URA recently announced their underground Masterplan for a better-connected Central Area including Orchard Road, stretching from Palais Renaissance to Orchard Plaza. This infrastructure endeavour is expected to benefit retail malls by increasing the foot traffic along this stretch and is particularly important over the periods of May to July (Great Singapore Sale) and November to December (Christmas season), which typically experience higher rainfall due to the southwest and northeast monsoons. This all-weather connection should eventually benefit malls located further from transportation nodes such as bus stands and MRT stations.

A look at URA’s underground blueprint suggests a possible expansion of the retail area to the west of Orchard Road in future. Largely occupied by older malls such as Forum shopping mall, Far East Shopping Centre and Palais Renaissance, the provision of these underground linkways could motivate these underperforming malls to refresh themselves through asset enhancement works, attracting this potential ‘increase’ in foot traffic. While accessibility is key in generating foot traffic, the success of a retail mall also depends on the asset management strategies. This is evident in Paragon and Far East Plaza which have done well over the years despite the absence of underground links. On the flipside, this improved accessibility could come at a cost to the malls located nearest to these transportation nodes as shoppers now have more choices. Retail spending could fall as a result of the dispersal of foot traffic to these outlying areas which were once regarded by shoppers as “too far” to walk under the hot tropical sun.

While shoppers may welcome such infrastructure, not everyone shares their enthusiasm. Existing mall owners have raised their concerns citing costs and implementation difficulties while others fear their redevelopment plans could be stalled if they do not comply with this underground Masterplan. Anticipating this push back, the government would reimburse up to $28,700 per sqm in cost for parts of the linkways that are built on state land. For those on private land, the government will foot half the bill, up to $14,400 per sqm. On redevelopment projects, the URA have clarified that only major works where over half of the existing building is demolished would trigger the requirements imposed by this underground Masterplan.

Anecdotally, there are concerns over the hollowing out of pedestrian traffic from the street level, taking along with it invaluable retail dollars. Could this mark the end of the Orchard Road street level shops? Unlikely. This underground network would expand the holding capacity of Orchard Road and further enhances the shoppers’ experience by separating those preferring an open street feel from shoppers who like a cooler controlled environment.

This recent underground Masterplan is not entirely new; fragments of the concept can be found as early as 2000. The government has revisited their incentives and sweetened the deal for landlords. It remains to be seen if this monetary push is sufficient to re-ignite this infrastructure program especially along Orchard Road. If not, it has definitely incited public discourse and awareness of such underground links.

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