Far East ties up with Parco to run mall at Clarke Quay
Recent retail moves, like topping Somerset tender, signal revived interest in mall sector
AFTER lying low for years, Far East Organization is back in the mall business with a vengeance.
Just a day after topping the tender for the former Glutton’s Square site in Somerset with a $421.1 million bid, it has announced ambitious plans for a glitzy riverside mall above Clarke Quay MRT station.
The firm said yesterday that it has signed a memorandum of understanding with Japan-based shopping centre manager Parco to run the 200,000 sq ft complex.
‘Parco…will add tremendous value in introducing the latest and most refreshing cutting-edge concepts to liven the retail scene in Singapore,’ said Far East chief operating officer for retail and lifestyle concepts Chia Boon Pin.
The mall will be the retail component of Central, Far East’s $500 million mixed development on the Singapore River.
The company also has ambitious plans for the Somerset site and may hire an international architect to work with a local one to produce a stand-out design, said sources.
‘Somerset is a very prime site. We see a lot of potential in it,’ said Mr Chia.
Far East’s recent retail moves suggest it has discarded its strategy of the 1970s and 1980s when it developed strata-titled malls for sale, sources said.
It now sees more return in developing malls for investment, which is not surprising given the high returns.
Knight Frank executive director Danny Yeo said retail investments can give returns of about 7.5 per cent, higher than other sectors.
‘It’s an obvious choice, especially when supply of retail space in the past five years has grown at less than half a per cent per annum,’ he said.
He expects prime retail rents, which are around $20-$40 per sq ft (psf), to grow at least 10 per cent this year as tourist arrivals and consumer expenditure grow.
With so few retail plots left, the Somerset tender was an opportunity to land the last of two trophy sites that have been put up for sale, consultants said.
Far East was the fourth-highest bidder in the Orchard Turn tender. Its Central mall will open late this year, about the time Singapore’s largest mall, VivoCity, opens in HarbourFront.
Mr Chia expects rentals of $6.50 psf to $40 psf, or an average of $12.50 psf.
Far East said its successful youth-oriented concept at Level One at Far East Plaza will be ‘further refined’ for the Central mall.
It will feature a ‘contemporary, hip concept targeted at young globalised urbanites’ - the sort of chic seen in Odaiba, Japan’s famed shopping and nightlife hot spot, the firm said.
A typical shopper at the mall, which will have 600 shops on five levels, will be a 25 year-old female, said Parco (Singapore) director Shuichi Hidaka.
He said they aim to bring in new Japanese retailers in food and beverage and lifestyle goods. There could be a Japanese or local supermarket plus local and international names.
CB Richard Ellis will co- market the mall with Parco.
Central also has 227 Soho (small office, home office) units, 120 studio office units, 121 larger strata-titled office units and 380 parking spaces.
Far East has sold about 95 per cent of the Soho units and 70 per cent of the studio offices.
Source : Straits Times - 20 Jan 2006
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