Executive Director of Cathay Organisation (you know, the cinema people), Choo Meileen, has lashed out at the government for imposing fees which have increased development costs for landlords, which she blames in part for the Orchard Road slump in human traffic.
In a forum letter to the Straits Times, Ms Choo explained that the drop in customers is due to limited offerings in our famous shopping belt:
“The truth is, Orchard Road is very boring because what is on offer as a shopping experience is no different from that of any of the large suburban malls. There is not much point in hyping up Orchard Road with the proposals mentioned if no one is going to shop there. While the suggestions for a milieu of smaller interesting shops are good, these shops can never afford the rent.”
Ms Choo then went on to describe the prospects facing landlords, and why smaller independent retailers are being priced out of the market:
“There are two types of landlords here: real-estate investment trusts and private developers. The former have an obligation to give certain expected returns to shareholders, and both have to bear the very high costs of development in Singapore. Some of these include submission fees, fees to engineers, massive development charges to the Government, and the high cost of construction and labour. It is not the landlord who is the beneficiary of all these fees and costs; it is the Government. I am sure landlords would love to have different offerings that would distinguish their malls, but unfortunately, it is the usual suspects who can afford to pay the rents to give developers a chance to recover costs and have some form of return for the risk they take.”
Finally, Ms Choo dissed the idea of a closure of parts of Orchard Road for a permanent “pedestrian mall”, saying:
“It is the duty of those who create these costs to ensure that the creative ideas and government revenue or needs are never allowed to run ahead of the revenue- generating capabilities of the areas’ tenants. Unless the root of the problem is addressed, all the money that is going to be spent on pedestrianising, bringing in shows and so on is not going to save Orchard Road.”
The slump in human traffic along Orchard Rd is proving a headache for retailers.
Squeezed by landlords who have imposed record-high rental costs, they also have to fend off the challenge of online retailers who can afford to sell similar goods at a lower price.