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King Albert Park strata mall to house cinema, more shops
FACED with promised anchor tenants that did not show up, falling retail rents and low occupancy, owners at the mall where McDonald's Place at King Albert Park once stood have taken matters into their own hands.
Current owner and tenant EagleWings Group will expand its footprint in the strata mall come December by opening a cinema called EagleWings Cinematics which boasts 153 seats, including a premium lounge with butler service and a fashion store called JoMaChi.
Carl's Junior and Taiwanese sugar-free café Camaca will also open in December, in partnership with EagleWings. There will also be an optical shop run by related parties to the Eaglewings Group, as well as an Eagle Eye Centre outlet.
These efforts cost "several millions" and will take up more than 20 units rented and owned by EagleWings and related parties, founder and medical director of Eagle Eye Centre and co-founder of EagleWings Group Julian Theng told The Business Times on Friday.
Such efforts have also encouraged other retailers to come on board, like Japanese restaurant Gaijin and bubble tea shop LiHo, said the ophthalmologist.
These new offerings are also the fruit of months of effort by the Management Corporation Strata Title (MCST) to inject life and energy into the strata mall, which has been struggling to attract tenants - with some disgruntled tenants even contemplating a lawsuit.
Two years since its completion, occupancy for the mall's 107 units is currently just under 50 per cent, though this is projected to hit around 80 per cent by December.
Dr Theng's sister, Lisa Theng, who co-owns EagleWings Group, said: "We did this out of the need for the mall. We've seen so many failed strata malls and we didn't want KAP Residences Mall to follow the same path."
The mall at 9 King Albert Park was once home to McDonald's Place, which housed a McDonald's and Cold Storage as well as McDonald's corporate headquarters. It was sold to Oxley Holdings for S$150 million in 2012 and was redeveloped with several other developers into KAP Residences Mall and a private residential component upstairs.
Dr Theng and Ms Theng, who live nearby, had bought two units in the new mall with the intention to become landlords, and said they were told before purchasing that there would be a McDonald's and Cold Storage. But after the mall obtained TOP in November 2016, "it was just empty", said Ms Theng, who is also managing partner for Colin Ng & Partners. "It was rather dismal and depressing to say the least."
After six months of not finding a tenant, they rented another three units and started a restaurant called EagleWings Loft, expanding on the F&B component of their existing yacht charter business. Other tenants, such as salons, spas, a clinic and tuition centres, have since trickled in.
But owners still found it challenging to attract tenants. McDonald's did not materialise, and the basement supermarket space is still vacant.
There were also issues with the strata units - they were small, and almost every unit in the mall came with an accessible toilet.
"Most of us landlords were a bit disappointed, the units were already narrow and there was a toilet in every one," said Dr Theng.
From an anticipated S$15 per square foot at the beginning of the mall's life, rents have fallen steadily to S$6 psf today.
"Owners had units for two over years with zero rental income; its very frustrating for them," said Ms Theng.
BT understands that owners who are unhappy with the developer have sought legal advice. When asked about this, Dr Theng and Ms Theng said they had nothing to disclose about the matter and that they were not involved.
Dr Theng said: "While I knew there were people who are still upset, like I was, we have to try to make the best of the situation."
This year, the siblings joined the MCST for the mall, after an AGM, which comprised owners for the first time. The previous MCST was developer-appointed.
They and the 11 other MCST members began a concerted effort to revive the mall's prospects by creating a theme and curating tenants accordingly. That theme is now "Life in its Fullness", which encompasses health and wellness, family, education, F&B, and lifestyle and entertainment.
But finding tenants was not easy because of the mall's small units. They came up with the idea of bringing in a cinema to draw more crowds, and talked to some established players. But that, too, did not pan out "because the mall was not designed for one in the first place", said Dr Theng, so they decided to start their own.
He added that their involvement in the MCST helped with making these new ventures possible.
For example, a tuition centre occupied a space where they wanted to build the cinema, so they worked with the landlord and the centre to relocate the centre and helped with its renovation costs in combining the units.
"We were able to do the things we did here only because we could knock down walls," said Ms Theng. "Getting landlords together was important."
Negotiations are in progress with more players for potential tenancy, they said, and the supermarket lot is getting some rental interest.
"Once we had the cinema in place as well as the initial mass of tenants, the confidence in the mall's potential picked up," said Ms Theng. "Thats what we wanted all along - to bring in the community, and life and energy."
Asked about the rapid expansion of EagleWings Group in the span of just three years of its beginning, Dr Theng said: "I told my sister, business sense is important but our primary goal is to bring life to this community.
"It might not be the first thought a businessman would take but we had a passion for this community and we wanted to bring meaningful life, and then we had to make sure it makes business sense as well."