Development plans at Orchard Rd

Not many choice sites left on Orchard Road

THE scramble for the last development sites in Orchard Road is well under way and one thing is already certain - no one in this race wants to lose the plot.

Not that there is much left to lose: Of the four plots earmarked for retail and entertainment in the great Orchard Road revamp unveiled earlier this year, two are already the subject of bidding wars while the other pair has far less appeal.

The prime candidates are Orchard Turn and Somerset sites, both with 99-year leases.


Orchard Turn received a minimum bid of $600 million last month, sparking a flurry of rival offers that could push the final price to around $1 billion. The Somerset site tender was triggered by a bid of $200 million earlier this week.

Developers with 'Orchard fever' who get trumped on either site might have to consider taking up one of the less desirable pair - the carpark opposite Orchard Cineleisure and the empty plot behind the Singapore Visitor Centre.

These are designated development sites but are quite small and available on only 15-year leases.

The carpark is 4,900 sq m; the Visitor Centre about 1,890 sq m. The Somerset site, by contrast, is 8,000 sq m and the Orchard Turn site, 21,000 sq m.

Property consultants say the smaller plots are 'not that attractive' to developers because of the unusually short leases in an area where most sites boast 99-year leases.

'Fifteen years may be just enough for a single-storey development with a simple structure, like a food court, because no one is going to build something with high-quality finishes for something so short-term,' said Knight Frank's director of research, Mr Nicholas Mak.

He added that the short-term leases may have been planned by the Government to allow for flexibility in the use of the empty plots.

Other observers suggested that putting up all four sites for 99-year lease at the same time could be too much for the market to handle.

'While interest level in Orchard Road is bullish, releasing too many sites for long-term development within a short span of time may destabilise the market,' said Colliers International's associate director of research and consultancy, Ms Tay Huey Ying.

'There is merit in releasing these two sites for short-term leases while the Government monitors the impact of the Orchard Turn and Somerset developments on the retail market.'

Apart from the four designated makeover sites, the rest of Orchard Road is now pretty much a dead-end street for brand-new developments.

Market watchers have pointed out three possible development plots: the Thai Embassy site, which the Thai government is looking to redevelop with expert help; the carpark in front of Somerset MRT station, owned by the Urban Redevelopment Authority; and the site occupied by the Killiney Road post office.

But the Thai Embassy site is not for sale to private developers and little is known about the other two plots, including whether they will be released by the Government for tender.

With so little space left for new development along the shopping street, developers keen to get in on the action might have to consider expanding into Orchard Boulevard or redeveloping older buildings along Orchard Road.

'Older buildings under single ownership with redevelopment potential include Wellington Building, International Building and all those towards Tanglin Road such as Forum, Tanglin Mall and Tanglin Place,' said Ms Tay of Colliers.

- AsiaOne, 8 Oct 2005.