Stimulation of Singapore’s retail marketMay 17, 2019 / By
In the first four months of 2019, the Singaporean government made several announcements that generated waves in the local retail market.
In January, plans to re-energise Orchard Road was announced to reposition Orchard Road as a must-visit lifestyle destination. This will be done through the introduction of different experiences such as arts, entertainment, lifestyle and family in each of the four Orchard sub-precincts, namely Tanglin, Orchard, Somerset and Dhoby Ghaut. Some plans kicked off as early as May 2019 such as the eight-month-long trial to bring in experiential activities the likes of art performances, pop-ups and food trucks to enliven the pedestrian mall in Orchard Road. Future plans include mixed-use developments to be built at the upcoming Thomson-East Coast Line Orchard Interchange MRT station.
Figure 1: Development Opportunities in Orchard and Jurong
Source: ESRI, Urban Redevelopment Authority, Singapore Tourism Board, JLL Research
In March, the Strategic Development Incentive Scheme (SDIS) was unveiled alongside the Draft Master Plan 2019. To drive urban transformation, the SDIS hopes to encourage the redevelopment of older non-residential buildings in strategic areas such as Marina Centre and Orchard Road by allowing deviations from the Master Plan in terms of development intensity, land usage and building height should the change prove transformational. Playing along with the experience economy, a transformational change will spark consumer interest and shape consumption habits.
Notwithstanding its challenging eligibility criteria such as requiring the amalgamation of at least two sites, the scheme has already sparked interest amongst asset owners. This includes UIC after its recent buyout to gain full control of Marina Square Shopping Centre and Marina Mandarin Singapore jointly with its parent company UOL.
In April, the Ministry of Trade and Industry (MTI) revealed a SGD 9 billion investment by Singapore’s two integrated resort operators to expand and refresh their non-gaming components in exchange for the extension of exclusive casino operations until end-2030. The expansions will include two new attractions at Resorts World Sentosa – Minion Park and Super Nintendo World, three new hotels adding around 2,100 rooms, a 15,000-seat arena at Marina Bay Sands and additional exhibition space.
In the same month, the Singapore Tourism Board announced a new integrated tourism development in Jurong Lake District, west of Singapore, which will be ready by 2026. The government agency launched an expression of interest for the development which will feature a hotel, attractions, eateries and shops on a 7 ha site next to Chinese Garden MRT station and the new Science Centre.
These initiatives underscore Singapore government’s commitment to actively stimulate the economy through the tourism industry, as they set the stage for a more vibrant retail market in Singapore. Afterall, according to MTI’s projection, the expansions of the two integrated resorts alone will create up to 5,000 more jobs directly, attract half a million more international visitors annually and contribute SGD 500 million to the economy.
For investors and developers, there are opportunities to be discovered, be it from unlocking additional land value from their existing assets, or investing in developments with potential for transformation, or in green field sites released by the Government.
Table 1: Strategic Development Incentive Scheme Eligibility Criteria
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