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HARBOURFRONT PLANS MEGAMALL FOR SINGAPORE

By Susan Thorne

HarbourFront Mall will create a new retail-business hub.

Economically, 2001 may have been the worst year for Singapore since gaining its independence in 1965. But there is one bright spot on the retail development scene, at least, in this island territory of 4 million people. Plans are afoot for the HarbourFront Mall, a landmark mixed-use project on a 20.3-hectare (50-acre) harborside tract south of the Singapore River. When it opens in 2004 or 2005, HarbourFront will feature three levels of terraced gardens and a park sloping down to the sea. The portion closest to the waterfront will be occupied by Canal Village, an area of glass-fronted buildings housing 1 million square feet of retail, plus entertainment, which will make it Singapore’s largest mall.

Though the particular character of retail tenants has not yet been decided, a hypermarket and an entertainment facility (possibly a cinema or multiplex) are expected to fill anchor positions. There will also be an outdoor amphitheater as well as open-air restaurants and cafés on the upper terraces and along Canal Promenade, a walkway beside a man-made waterway on the lower level.

The development is intended as both a business and lifestyle hub; the mall area will be flanked by twin office towers that are scheduled for completion next year. A subway station will be created to connect directly to the new project. Nearby is the Keppel Wharf district, a former shipping port area that is being converted to 3,000 condominium homes. Next to HarbourFront is the terminus of the cable car to Sentosa Island — an offshore resort area with a golf course, zoo and other attractions — and Singapore’s international cruise ship port.

Apart from its new spaces, the project involves redevelopment of the World Trade Center, a high-rise office complex that has an additional 190,000 square feet of retail on three levels. Developers are retenanting and refurbishing the retail space for a young-lifestyle market and plan to reopen it in October. More than 35 million people are expected to visit the complex each year.

Public sector support for the project is substantial. The property company responsible for financing the development, called The HarbourFront (HF), is 80-percent owned by Mapletree Investments, a subsidiary of Temasek Holdings, which is the investment-holding arm of the Singapore government. Such government involvement is not unusual; Singapore is a well-run, highly regulated state where government plays a larger part in many aspects of life than in most free-market countries. Eighty-five percent of residents live in public housing, for example.

“The government is very astute, and it runs the country like a business,” said Derek MacKenzie, managing director and partner at DesignPhase, a Singapore retail design firm. The city-state is working with retailers, for instance, on a master plan for its shopping industry called Retail 21. “It makes plans and tends to carry them through.”

HarbourFront’s location in the Maritime Square area is well situated to tap into both of Singapore’s customer markets: local residents and visitors. Shopping is the most popular activity for the 6 million visitors who travel to Singapore each year, accounting for 53 percent of their total expenditures, or an average of S$434 ($236) per visit. The former colony has developed into a sophisticated shopping destination for foreign tourists, said MacKenzie, “a place where you can buy whatever you find elsewhere in the world.”

Shopping is also a primary leisure activity for the residents of this small (242 square miles) city-state.

“Retailing is a big part of everybody’s life here,” MacKenzie said. “Singaporeans absolutely love to shop and eat out.”

Not surprisingly, then, retail sales are significant to the local economy, averaging about S$21 billion per year, S$2.58 billion of which is contributed by tourists.

“This shows that, by and large, domestic consumption is still the backbone of the retail industry, while tourist spending is the extra that contributes to the Singapore economy,” said Lau Chuen Wei, executive director of the Singapore Retailers Association.

Both tourist and resident spending, however, have languished in the past several months. The number of affluent Bruneians, Indonesians, Japanese and Malaysians who used to come to shop here has dropped, and local consumers are shifting down in spending.

“High-end fashion items tend to see a dip because consumers are making changes in their purchase choices and seek out more midrange items,” Lau said. Year-over-year retail sales were flat overall for the 12-month period ended November 30, 2001, the association reports; spending patterns show that shoppers are buying more essential and everyday items (food, furniture, medical goods, sundries) while cutting back on apparel and footwear, restaurant food and beverages, and watches and computers.

These are all symptoms of the latest Asian slowdown, caused in part by the U.S. recession and made more serious after the Sept. 11 atrocities in New York City and Washington, D.C.

Singapore’s national economy contracted by an estimated 3 percent in 2001, according to DTZ Debenham Tie Leung, a Singapore financial consulting firm, which describes the present recession as Singapore’s worst since its independence.

Yet the retail sector appears to be weathering the downturn fairly well on the whole, the firm’s research indicates. Retail occupancy remained at 97 percent islandwide as of November 2001, and vacancies are almost nil at malls in good locations. Rents for some prime mall locations increased in the 12 months leading up to February 2002, and now range from a high of $37 per square foot for shops in the prestigious Orchard Road district to less than $25 per square foot in other areas. DTZ cautiously predicts that the economic situation will improve in the second half of 2002, with fiscal growth possibly running as high as 2 percent.

The addition of HarbourFront will strengthen a government-supported trend toward decentralization of retailing in Singapore, which is seeing shopping and leisure destinations developing all over the island. Traditionally, world-class shopping in Singapore has been synonymous with Orchard Road, the thriving retail district fanning out from the junction of Scotts Road and Orchard Road, about one mile inland from Marina Bay. Branded fashion shops (Benetton, Chanel, DKNY, Esprit, Gucci, Louis Vuitton, Mango, Max Mara, Prada and others) and Japanese department stores such as Takashimaya are grouped in enclosed malls such as Centrepoint, Lucky Plaza, Ngee Ann City, Scotts and Tangs. The Orchard Road shopping belt of roughly 12 city blocks contains 6 million square feet of retail space, amounting to roughly one-quarter of the Singapore total of 24.5 million square feet.

Over the past decade, however, a growing number of new malls and other retail developments have sprung up in the eastern downtown waterfront and river district. A milestone was the 1995 completion of Suntec City Mall in the Marina City area, an 888,000-square-foot shopping center (Singapore’s largest at present) adjoining the city convention and exhibition hall. (The five distinctive Suntec towers are arranged to look like a human hand, with four tall “fingers” and one shorter tower representing a thumb.) Other, smaller centers have joined Suntec in the part of town east of Orchard Road. They include Bugis Junction, an enclosed streetscape of shops, with 434,747 square feet of retail, which opened in 1995; Marina Square; and Raffles City.

A portion of the Marina district’s reclaimed land is the site of a new modern theater complex, the Esplanade, due to open this year, which will also include retail space. The Stadium Cove waterfront to the north along the Kallang River has become a retail destination, enhanced by the addition last year of a weekend open-air Asian crafts bazaar consisting of 100 vendors housed in attractive rows of white tents. Former warehouse areas along the Singapore River banks have been revived with new restaurants, shops and entertainment in the Boat Quay, Clarke Quay, One Fullerton, Riverside Point and Robertson Quay areas. HarbourFront will create substantial change along the southern shore. Elsewhere on the island, government planning is encouraging retail development in suburbs such as Woodland, which has the 250-shop Causeway Point shopping center.

Such alternative shopping destinations might appear to pose a competitive challenge to Orchard Road, but their merchandise mix and target markets are different, and the net effect is to broaden the range of retail offerings. Suntec City, for example, is family-friendly and offers shopping convenience.

“The entire Marina district is gradually being seen as an alternative shopping destination [to Orchard Road], especially because it is easily accessible via public transportation as well as by cars,” said Stephanie Ho, associate director of retail at DTZ. In waterfront and river areas, on the other hand, the retail mix concentrates principally on food, leisure and entertainment, Ho said. She predicts this trend will continue.

Meanwhile, Orchard Road’s continuing ascendancy as a premier shopping street is underscored by its selection by international retailers for their first Singapore locations or flagship stores. Recent examples are Virgin Store, Waipai (a fashion brand from Spain) and retrofitted Bulgari and Cartier stores.

 

 

 

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