Only 3 malls in Orchard Road to be completed in 2013

A shocking supply squeeze strikes.

According to Maybank Kim Eng, between 2013 and 2016, only three malls along Orchard Road (representing ~12% of available stock) are expected to be completed – and all in 2013.

Here's more from Maybank Kim Eng:

They include the asset enhancement works to The Heeren (156k sq ft), Orchard Gateway (180k sq ft) and the redevelopment of 268 Orchard Road (147.5k sq ft).

The Heeren will be almost fully occupied by Robinsons (which will move out of Centrepoint) and Orchard Gateway is already more than half pre-committed with tenants such as Crate & Barrel, Religion, Swatch Megastore, Nike’s new concept stall called Amplify Women’s andlibrary@Orchard.

According to property  agent CBRE, Prime Orchard Road rents were unchanged QoQ and YoY at SGD31.60 psf pm in 3Q12, while the capital value for strata-titled retail space rose 3.8% YoY to SGD6,500 psf, albeit unchanged QoQ. Occupancy rate remained robust at 93.7%.

Retail demand to remain steady. Indicators are still showing a general positive tone in the retail market despite the gloom over the world economy. As of Sep 2012, the RSI, excluding motor vehicles, and the F&B sales index are up 0.7% and 2.2% YoY, respectively.

Prominent store openings in 3Q12 included Mulberry (first Asian flagship store at Mandarin Gallery), Carven and Crate & Barrel (Ion Orchard), Vivienne Tam (flagship store at Scotts Square), Paris Baguette in Wisma Atria, Malaysian celebrity Chef Wan’s 1-Market and Japanese restaurant Tsukada Nojo in Plaza Singapura.

We expect retail demand to remain steady on healthy tourist arrivals and domestic spending, as well as new retailers and international concepts.