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Ion looking empty? Still fully leased, says mall
Publication Date : 06-08-2012
Shoppers have noticed that Basement 3 of Ion Orchard has looked sparse for a while, since more than 10 shops moved out after their three-year leases expired last month.
But the iconic mall said it is fully leased, and is undergoing its first major revamp since it opened three years ago.
Gone are Wacoal, Kipling, and m)phosis, among others. Coming in will be Swedish retail giant H&M, which will open its second store here in the mall by the end of the year. The 20,000 sq ft store will span two storeys in Basements 2 and 3, taking over the space of adidas, The North Face and Guess.
It will be among 24 new tenants which will move in by the end of the year, including Southeast Asia's first Yves Saint Laurent Beaute boutique store. The brand, which left Asia-Pacific markets three years ago, sells fragrances, cosmetics and skincare products and will open in the middle of this month.
Tenants who are setting up their first stand-alone stores in Singapore include Vivienne Westwood Anglomania, French fashion label Carven, German skincare label Dr Hauschka and Greek beauty brand Apivita.
The mall's food hall in Basement 4 is also undergoing renovation and will house a new concept to be completed by the fourth quarter of this year.
A spokesman for Ion Orchard said tenants typically signed leases of between three and five years when the mall opened in July 2009.
Some were up for renewal this year, giving the mall the opportunity to refresh its offerings.
The mall's popularity is helping it to buck the trend of cooling rental prices here.
A report released last month by property consultancy CBRE showed that rental rates in prime shopping areas here have dropped from US$470 to $454 per sq ft a year in the first quarter of this year, but the Ion spokesman said its rents have been on the uptrend, although he declined to give figures.
Some of its tenants say they exited because of the increased rent.
A spokesman for Kipling, an international bag label, said it had not renewed its lease because the asking price was "just a bit too ridiculous".
She said: "We were asked for almost double that of our previous rent. Even if we had changed locations, the prices were still too high so we had to move out."
Another international retailer who declined to be named revealed that her firm was asked to pay 50 per cent to 70 per cent more. She said: "Although we were satisfied with sales, the increase in rent would mean making a loss. It's not a justifiable asking price for an economy which is likely to be slower."
When asked, Ion Orchard declined to comment on the rent hikes.
By comparison, rental rates at Plaza Singapura and Raffles City went up by about 6 per cent and 8 per cent respectively over the last three years.
R'ST Research director Ong Kah Seng said he was not surprised to hear about the large increase in rent at Ion Orchard.
He said: "While 50 per cent to 70 per cent is on the high side, it was probably offered on the basis that there were other retailers waiting to come in who offered that price. Luxury malls like Ion have a queue of replacement tenants, so I wouldn't be surprised."
Some existing retailers such as local label 77th Street are happy to cough up extra rent for being in a premium mall.
Sarina Koh, its project development manager, said: "It was an up-and-coming space three years ago, and it's still the most 'happening' mall in town. It may be more expensive but it's a premium mall, so we're happy to stay."
Sales assistant Teo Jun Hao, 23, who prefers to shop at Far East Plaza, said: "Ion is beginning to sound edgy again. With the entry of H&M, I believe it will become much more popular to a larger group of shoppers, who prefer affordable but unique fashion items."