Recovery and rejuvenation a boost for Orchard Road and Cairnhill
By Timothy Tay
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - The Orchard Road shopping belt is characterised by, and thrives on, the flow of Singapore’s international tourist arrivals. The tourist industry was extremely hard-hit at the height of the Covid pandemic.
According to official statistics, incoming tourist arrivals fell from about 4.8 million in 4Q2019 to just about 158,000 in 4Q2021. But the reopening of international travel has resulted in a strong recovery as inbound tourist numbers rebounded to about 2.6 million in 4Q2022.
Retail rents are a leading indicator of the health of the retail market. Rental data tabulated by EdgeProp Singapore shows that islandwide retail rents fell from $11.08 psf per month (pm) in 2Q2020 to $9.01 psf pm in 1Q2022, says Bernard Tong, CEO of EdgeProp Singapore at the EdgeProp Master Plan Masterclass webinar on Feb 25.
However, a domestic-led recovery and loosening of pandemic-related measures saw retail rents pick up to about $9.81 psf pm in 4Q2022. This is still below the pre-pandemic level, but a positive trend is expected for the upcoming quarters.
This ongoing recovery comes without the major driving force of mainland Chinese tourists, which until January this year had been locked behind international travel restrictions. However, early indications point to a steady return of mainland Chinese tourists throughout 2023.
Improving retail rents, but below 2019 peak: EdgeProp Market Trends
Prime residential neighbourhood
More than just a luxury shopping belt, Orchard Road is also surrounded by prime residential neighbourhoods such as Cairnhill, Newton, and the River Valley district.
These central neighbourhoods are near several schools. EdgeProp Singapore’s Landlens tool shows that within approximately 2km of the Orchard/Cairnhill areas are St Joseph’s Institution Junior, Singapore Chinese Girls’ School, River Valley Primary School, and Catholic Junior College.
The Orchard and Cairnhill areas also boast excellent public transport connectivity via several MRT stations. The Orchard Road area is linked to the new Orchard MRT Interchange on the North-South and Thomson-East Coast Lines, as well as the Somerset MRT Station on the North-South Line. Meanwhile, residents in Cairnhill are near Newton MRT Interchange on the Downtown and North-South Lines.
Plans are also afoot to enhance the overall vibrancy of the Orchard Road shopping belt in the future, and the latest master plan outlines the creation of distinct zones along the shopping belt. It highlights the Tanglin area as a future arts and mixed-use neighbourhood, transforming the Somerset area into a youth destination, and introducing more family-friendly green spaces in Dhoby Ghaut.
Some of the older developments in the Orchard Road area have tapped into the future rejuvenation plans for the Orchard Road area to close a handful of collective sales in recent months. For example, Tanglin Shopping Centre on Tanglin Road was sold to privately-held real estate investment firm Pacific Eagle Real Estate for $868 million or $2,769 psf per plot ratio (ppr) in February 2022.
Subsequently, in December, Ming Arcade on Cuscaden Road was sold to Singapore family office Royal Group of Companies for $172 million, which translates to $3,125 psf ppr. This has set a new benchmark for a commercial en bloc sale in the Orchard Road area.
Tight supply, shrinking price gap
However, the Cairnhill and Orchard areas are both extremely mature and well-developed, which limits the supply of new housing. Resident demographics also show that Orchard Road is a popular residential locale for many expatriates. The area has many locational attributes that are at the top of the list for this demographic, namely, the convenience of its central location, proximity to amenities, and transport connectivity.
Using EdgeProp Singapore’s Landlens tool, Tong points out that only 14 new private residential projects have been launched in the Cairnhill subzone within prime District 9, which encompasses Orchard and Cairnhill, in the last five years. Developer sales data tabulated by Lendlens show that about 83% of the available units from these recent launches have already been sold, with only about 450 units left for sale.
Limited supply of new launches in D9: EdgeProp LandLens
Some of the recent launches in the vicinity include 3 Cuscaden on Cuscaden Walk and Cairnhill 16 on Cairnhill Rise, while the handful of luxury launches are 19 Nassim on Nassim Hill, Park Nova on Tomlinson Road, and Klimt Cairnhill on Cairnhill Road.
Buoyant land sales and a robust new launch market in the city-fringe and suburban areas have gradually narrowed the gap between new private residential prices in the Core Central Region (CCR) relative to the Rest of Central Region (RCR) and Outside Central Region (OCR), notes Tong.
Price gap narrowing between CCR and other areas: EdgeProp Market Trends
EdgeProp Singapore’s Market Trends tool shows that in 1Q2018, the average new launch prices in the CCR and RCR were $2,697 psf and $1,673 psf respectively, with the average price in the OCR at $1,305 psf.
Don't miss out to check out the hottest new launch condo and new landed property in Singapore
However, based on the latest available data, by 1Q2023, the price gap between average prices in the CCR ($2,899 psf) and RCR ($2,562 psf) had shrunk to about 13%, with the average price in the OCR moving up to $2,111 psf.
Check out the latest listings near Orchard Road, Tanglin Shopping Centre, Cairnhill, Cairnhill 16, Klimt Cairnhill, 19 Nassim, Park Nova, Cuscaden Walk, Newton, River Valley, St Joseph’s Institution Junior, Singapore Chinese Girls’ School, River Valley Primary School, Catholic Junior College, Orchard MRT Interchange, Somerset MRT Station, Newton MRT Interchange
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