[UPDATE] NTP+ mall at New Tech Park close to 97% leased
By Cecilia Chow
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - Like most Singaporeans, Donald Han spent the “circuit-breaker” months of April to June last year working from home. As he lives in the Cairnhill area, he would go jogging every afternoon at about 4pm. It was not to Singapore Botanic Gardens that he headed, but to the retail malls along Orchard Road. He wanted to see how business was affected by the circuit-breaker.
“Most malls along Orchard Road have F&B outlets inside, as the prime street front units are tenanted by the luxury brands,” observes Han. “During the circuit-breaker, many of the retail stores were closed, and F&B outlets only opened for takeaway business. Some mall landlords even turned off the lights, hence the mall was in darkness, and people were afraid to go in.”
This is not just idle observation. After all, Han is the CEO of Sabana Real Estate Investment Management, the manager of Sabana Shari’ah Compliant Industrial REIT. At that time, he was overseeing the asset enhancement initiative (AEI) at the biggest property in the REIT’s portfolio, namely New Tech Park at Lorong Chuan. Part of the AEI at the B1 industrial space building was the development of a new, two-storey commercial extension with F&B and retail space dubbed NTP+.
The construction of NTP+ was originally scheduled for completion sometime in mid-2020. Due to the circuit-breaker and slow restart of the construction sector, NTP+ only obtained its Temporary Occupation Permit in 1Q2021. The original construction budget for NTP+ was $20 million. “Despite Covid, we have kept within the budget,” says Han. “If I were to do this same development today, it would cost 20% to 30% more as construction costs have increased due to Covid.”
NTP+ has 26 retail and F&B units, of which 25 are situated on the first level. The 26th is on the second level, and designated for use as a food court. Today, NTP+ is 96.7% leased. Only two units are available, although one unit is already “under offer”, says Han.
NTP+ has 26 retail and F&B units and is 96.7% leased to date (Photo: Samuel Isaac Chua/EdgeProp Singapore)
New F&B concepts
Key F&B tenants include SF Group, which will launch four new restaurants: Collin’s western cuisine, Clan 7 Chinese restaurant, Saveur Thai restaurant and Kopi Clan. Wine Connection will be taking up three units, and will be launching a bistro concept as well as its wine retail shop.
Other F&B tenants include Dutch Colony Coffee, The Social Alley bistro and 96 Degree Fruitz Bar. Restaurants that will open there include D’Penyetz (famous for its Ayam Penyet or smashed fried chicken); Iro Iro Japanese Restaurant; Singapore-born concept Bowl & Bowl, which features fried rice and porridge cooked by robots; Red Hotpack, an Asian fusion quick-serve concept; and Yuktan Chobeolgu-I BBQ Korean restaurant. Even the food court, called Foodies’ Clan, will be a new concept by an experienced F&B operator.
About two-third of the tenants are F&B, notes Han. “Many of the F&B concepts are new to market but are managed by experienced operators,” he adds. “We support local entrepreneurs.”
Even the supermarket operator, Ace Signature, is a new-concept grocer, specialising in international produce from China, Japan and South Korea. It will also be tech-driven with barcode scanning and cashless checkout, similar to Amazon Go, says Han. The supermarket will occupy about 5,200 sq ft of space.
Most of the tenants are in the midst of fitting out their units at NTP+, and the mall is likely to be fully operational in the next two to three months, notes Han. The mall is able to secure such a high occupancy of 96.7% given its catchment area, he adds. In the area are at least five schools, such as Australian International School, St Gabriel’s Primary School and Nanyang Junior College with a total student population of about 12,000. “They provide foot traffic especially during the traditionally quiet period between 2pm and 5pm on weekdays,” says Han.
The Lorong Chuan area is also largely residential, with more than 7,000 households in the condominiums nearby such as Chuan Park, Goldenhill Park and The Springbloom, as well as the private housing estate of Mei Huan Drive.
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Han: Many of the F&B concepts are new to market but are managed by experienced operators, and we support local entrepreneurs (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Easy access
New Tech Park is just across the road from the Lorong Chuan MRT Station on the Circle Line. Hence, NTP+ will benefit from a “captive market” made up of students and residents within a 2km radius as well as those working at New Tech Park. “New Tech Park is massive, with 832,373 sq ft of gross floor area,” says Han. “In the last six months, new multinational tenants that came onboard include those in the electronics and data centre sectors.”
What’s more, New Tech Park has 477 parking spaces in its covered carpark, which will be shared by patrons to the outlets at NTP+ Mall and the tenants of the business space. The parking space is ample, compared to most suburban malls, he adds.
The mall is also designed such that the F&B tenants have premium frontage and there is a dedicated space for food delivery riders to park their vehicles and zip in and out to pick up the food deliveries. “These riders do not want to spend more than 10 minutes trying to locate the F&B outlet in a mall,” says Han.
He has also taken into consideration Grab and taxi drivers doing food deliveries and is extending the grace period in the carpark to 15 minutes. “We try to make the carpark rates among the cheapest in the vicinity,” he adds. “The grace period at most places is 10 minutes, and ours is 15 minutes. We want to make sure that our tenants will do well even if there is a second circuit-breaker.”
NTP+ includes a 10,000 sq ft landscaped roof terrace that is open to the tenants of New Tech Park (Photo: Sabana REIT)
New amenities
Besides F&B outlets, food court and supermarket, other amenities at NTP+ include Anytime Fitness 24-hour gym, a hair salon and enrichment classes.
NTP+ has a total gross floor area of 43,000 sq ft, which includes a 10,000 sq ft landscaped roof terrace that is open to the tenants of New Tech Park. “This is a space created for community bonding activities,” says Han. The design of NTP+ is by Ong & Ong architectural practice.
Part of the asset enhancement at New Tech Park includes a new 600-seat auditorium. Asset enhancement of the main New Tech Park building is still underway: The infrastructure of the office space has been upgraded, with replacement of office lifts, revamped office lobby with new security turnstiles, and new toilets on the upper levels. These works are expected to be completed sometime in 4Q2021. “We will continue to implement staggered and targeted asset enhancement over the next 12-24 months to provide improved amenities to existing tenants and to attract quality expansionary tenants,” adds Han.
The monthly rents of NTP+ are said to hover between $8 and $10 psf. According to CBRE Research, prime retail rents of Orchard Road malls averaged $34.90 psf in 1Q2021, while those of prime suburban malls were $29.50 per month over the same period. While Orchard Road rents were down 9.5% y-o-y, the prime rents of suburban malls were down by just 0.5% y-o-y, according to CBRE.
Besides F&B outlets, food court and supermarket, other amenities at NTP+ include Anytime Fitness 24-hour gym, a hair salon and enrichment classes (Photo: Sabana REIT)
Signs of recovery
Retail indicators point to signs of recovery: unemployment has declined, shopper traffic has returned and business expectations have improved, notes CBRE. With the protracted closure of tourism borders, local spending has increased. Retail sales (excluding motor vehicles) posted a y-o-y change of –1.3% and 3.5% in January and February respectively, a marked improvement compared to the pre-pandemic period, notes the consultant in its 1Q2021 Singapore Market View report.
Retailers from F&B, convenience stores and supermarkets were also increasing their footprint in 1Q2021. “At the same time, they have reinvented concepts, creating new and innovative brands to gain market share,” notes CBRE. Leasing enquiries from boutique gyms, beauty, health and wellness-related sectors remain relatively active, although their decision-making process is taking longer.
Sabana’s Han is optimistic that the retail sector is recovering. Demand for business space has picked up as well with 75% of the workforce able to return to the office. The strong take-up rate for the retail and F&B space at NTP+ also shows the importance of having a mall integrated with a B1 industrial space, especially if it is located within a residential area. “We worked closely with the authorities, and they want this property to be revitalised as well,” Han says. “It’s part of their decentralisation plan.”
Check out the latest listings near NTP+, Chuan Park, Goldenhill Park Condo, The Springbloom, Lorong Chuan MRT Station
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