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Thread: Ion Orchard offers rent rebates to tenants

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    Default Ion Orchard offers rent rebates to tenants

    http://www.businesstimes.com.sg/sub/...25027,00.html?

    Published March 24, 2009

    Ion Orchard offers rent rebates to tenants

    The incentive, on top of tax rebate, to be offered from July mall opening till Oct

    By UMA SHANKARI


    (SINGAPORE) Tenants at upcoming Orchard Road mall Ion Orchard will get rebates of up to 30 per cent of base rentals - on top of the 40 per cent property tax rebate from the government that developer Orchard Turn Developments will pass on to all tenants - once the mall opens in July.

    Citing the mall's opening in an 'unexpected economic climate', Orchard Turn Developments - which is owned by Singapore-listed CapitaLand and Hong Kong's Sun Hung Kai Properties - said that the rebates will be in place until the end of October.

    Ion Orchard has to date secured 80 per cent tenancy commitment and is in advanced negotiations for the remaining space, it said in an update yesterday.

    The amount of rebate each tenant gets will depend on a number of factors, such as when the tenant opens for business and whether he chooses to take part in certain Ion Orchard programmes.

    BT understands that one of the aims of the financial incentive is to get as many tenants as possible to open for business on July 21 (when the mall will officially open) in order to up the 'wow' factor.

    'As a committed long-term partner to our tenants we want to encourage them to work with us on our opening plans,' said Soon Su Lin, chief executive of Orchard Turn Developments.

    'As such, we are collaborating with them on various strategies and mall-opening incentives to support their store opening programmes, including offering financial incentives of up to 30 per cent of their contracted base rental, and specially designed recruitment and training programmes to facilitate their staffing needs. This will be on top of the 40 per cent property tax rebate from the government that we will pass on to all tenants.'

    Structural work on the mall, which has 640,000 square feet of shopping space, has been completed. The mall has also achieved its planned target retail mix of up to 60 per cent of the space leased to flagship stores, new-to-market brands and new concept stores, it said.

    Market watchers pointed out that retailers at Ion will miss most of this year's Great Singapore Sale, which will run from May 29 to July 26.

    Some said that this could hurt retailers, who will miss out on one of the busiest shopping periods of the year. But on the other hand, opening during 'sale season' is not good for retailers either, a market observer pointed out.

    At the other end of Orchard Road, Far East Organization recently told BT that its upcoming mall Orchard Central is about 65 per cent leased.

    Ion Orchard and Orchard Central, together with [email protected], are the first three malls to open along Orchard Road in more than a decade.

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    http://www.straitstimes.com/Prime%2B...ry_353732.html

    March 24, 2009 Tuesday

    Ion Orchard over 80% occupied

    Eight-storey mall opens in July with new top-end names; tenants get reductions in rent

    By Lim Wei Chean


    Set for a soft opening in July, Ion will introduce new brands like jeweller Harry Winston to Singapore. -- ST PHOTO: WANG HUI FEN

    ION Orchard hopes for a positively charged opening in July, having filled more than 80 per cent of its 300 stores.

    Among them, and occupying a shopfront in Singapore for the first time, will be brands like high-end jeweller Harry Winston and luxury fashion label Dsquared.

    The eight-storey mall will also provide designer labels like Diane von Furstenberg and Marc Jacobs and watch brand Patek Philippe their first stand-alone boutiques in Singapore.

    Familiar names like Cartier, Dior, Louis Vuitton and Prada will take up double-storey flagship stores at the 640,000 sq ft shopping centre, which is about two-thirds the size of Vivocity.

    To coax as many tenants as possible to open at the same time, the management has offered up to 30 per cent in rent cuts for three months until October.

    Orchard Turn Developments' chief executive officer Soon Su Lin said yesterday that over 60 per cent of the space has been leased to flagship stores, new-to-market brands and new concept stores.

    The last includes new concepts by Burger King and a gourmet supermarket from Hong Kong called ThreeSixty, which sells organic food and cleaning products. Shoppers can also look forward to new Japanese restaurants like Watami and Sho Teppan at the soft opening on July 21.

    The rental cut is a welcome boon for RSH Limited, which will take up six shops for its brands like Zara, Mango and Massimo Dutti.

    Said chief operating officer Kesri Singh: 'It's a good thing that Ion Orchard realise that times are tough now and we committed our shops at a financially better time.'

    The company had approached Ion Orchard to reconsider rents. Any kind of help is good, even for just three months, he said.

    Banding together to press landlords to ease rentals recently were the Singapore Retailers Association, Restaurant Association of Singapore, Singapore Jewellers Association, and the Textile and Fashion Federation.

    Government-linked landlords like the Singapore Land Authority, Housing Board and Sentosa Development Corporation have given 15 per cent reductions on rent for the entire year, but commercial landlords have resisted blanket cuts. Ion Orchard is the first to offer any.

    Two other malls are slated to open this year - Orchard Central at mid-year and [email protected] in November - but there are no indications that the developers intend to follow suit.

    Ms Soon said they understood the challenges of opening in such an 'unexpected economic climate', hence the 'opening incentives'. She said she had promised tenants to monitor sales for the rest of the year to see if any other help is needed later.

    Ion Orchard was leased out last September at prices of up to $80 per sq ft, compared with rents of $40 to $50 for the main Orchard Road stretch.

    A grand opening is planned for October.

    [email protected]

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