Ong Beng Seng-linked Hotel Properties’ potential project is the best bet to rejuvenate Orchard Road 

ORCHARD Road is decked out in Christmas lights and festive ornaments. There are Christmas villages featuring rides, games and a 14-m tall Christmas tree as well as snowfall shows. 

Drawing the crowds to soak in the year-end festivities will hopefully lead to rich takings for retailers in Singapore’s prime shopping belt.

Certainly, Orchard Road continues to attract new retail players and concepts, with many luxury brands keen to have a presence there. The area also boasts plenty of retail space compared with other shopping locations at home and abroad.

The valuation of Paragon Reit’s upscale mall and medical suite/office property Paragon – located in the heart of Orchard Road – rose by 3.5 per cent to more than S$2.8 billion between end-December 2023 and end-June 2024. 

However, tenant sales for the first three quarters of 2024 at Paragon’s retail space decreased nearly 7 per cent year on year despite higher visitor traffic in the first nine months versus the year before.

In general, rents at Orchard Road retail spaces are lower compared with pre-Covid pandemic days.

Data from the Urban Redevelopment Authority (URA) indicated that the median monthly rental of retail space in the Orchard planning area based on lease commencement was S$8.22 per square foot (psf) in Q3 2024, down 21 per cent from S$10.45 psf in Q4 2019. The vacancy rate for retail space in the Orchard planning area was 7 per cent in Q3 2024. 

Suburban malls, online shopping and overseas shopping havens fight with Orchard Road malls for the share of wallet of Singapore residents.

For one, new retail offerings across various Asian cities threaten Singapore’s draw as a shopping destination. Think of the recently opened retail spaces at the mega One Bangkok in Thailand. Also, visitors to Singapore who seek luxury shopping experiences may choose to visit The Shoppes at Marina Bay Sands.

Rejuvenation ideas

Put simply, amid intense competition among physical retail spaces, Orchard Road needs to up its game to be a premier shopping and lifestyle destination.

Ideas to enhance the Orchard Road shopping experience might include pedestrianising much of the road. A narrower and pedestrian-only Orchard Road will let shoppers easily wander from shops on one side of the road to another.

Maybe a heart can be created in Orchard Road as a focal point for large-scale activities and events. Or there can be quirky and edgy retail offerings provided at side streets off Orchard Road that await discovery by adventurous locals and visitors.

Possibly, space can be carved out in Orchard Road to add a major cultural offering such as a leading museum or a performance arts venue, which drives more people to visit the belt.

However, any of the above ideas face major execution challenges and may take a long time coming to fruition if at all.

Hotel Properties’ assets

A more immediate game changer for Orchard Road could come from a sizeable redevelopment involving one or more existing buildings, which might be starting to look dated.

Think of adding a new retail and lifestyle offering to Orchard Road that trumps existing leading destination malls such as Paragon and Ion Orchard in the Orchard Road belt, or top retail offerings outside the area such as The Shoppes at Marina Bay Sands, VivoCity and Jewel Changi Airport.

The likely best bet for a new Orchard Road development becoming a “must-visit” place for Singapore residents and visitors is the possible redevelopment by Hotel Properties Limited (HPL) of the trio of Forum, voco Orchard Singapore and HPL House, which are located close to HPL’s Four Seasons Hotel Singapore.

In late August 2023, tycoon Ong Beng Seng’s HPL announced that it had received a grant of provisional permission from URA under the strategic development incentive scheme to redevelop the three properties.

These properties sit on freehold or 999-year leasehold land along Orchard Road and Cuscaden Road, and have a total land area of 150,987 square feet (sq ft). Ong is HPL’s major shareholder and managing director.

The approval is for a mixed development comprising hotel, retail, office and residential components in two tower buildings of 64 storeys and 43 storeys on a six-storey podium with a rooftop garden, performance theatre and basement carpark. A separate 29-storey tower will be erected over the contiguous basement carpark. The total approved gross floor area for the proposed development is about 1.23 million sq ft.

HPL’s proposed redevelopment is important not just due to its size but also because it can inject vibrancy to a quieter stretch of Orchard Road. The proposed redevelopment can become a focal point to the north-west of Orchard Road and a gateway destination.

In its latest annual report, HPL said the proposed redevelopment will be transformative “if and when it is implemented and completed”.

At the annual general meeting in late April, HPL’s then-chairman Arthur Tan said the project is in the planning stage with “nothing concrete at the moment”. A funding option may involve taking in partners.

Ong’s travails

While HPL’s shareholders await more details to be shared on the proposed development, they could be closely tracking the progress in the case facing Ong, who has been charged with abetting a public servant in obtaining gifts and abetting the obstruction of justice, in relation to his dealings with former transport minister S Iswaran.

Ong’s next court date is in January 2025. Might the travails of Ong, who has been instrumental in growing HPL, impede the progress of the proposed redevelopment of the Orchard Road assets? 

Malaysian-born Ong, who is in his late 70s, played a key role in bringing the highly successful Singapore Grand Prix Formula One night race here. Will he make another major contribution to Singapore by leading a successful mega redevelopment project in Orchard Road? 

As Forum, voco Orchard and HPL House generate income and sit on land parcels with long tenures, HPL may not feel pressed to move quickly on redeveloping the properties.

Nonetheless, many stakeholders will be keen that HPL’s proposed redevelopment of Orchard Road assets moves expeditiously and is executed well. This project is pivotal to rejuvenating Singapore’s beloved Orchard Road retail and lifestyle belt.

The writer is a shareholder of HPL