New development replacing Park Mall to revitalise Dhoby Ghaut area
The sleepy corner of Dhoby Ghaut that housed Park Mall is getting a new lease of life.
Singapore-listed developer SingHaiyi Group unveiled plans yesterday for a new 10-storey building now under construction at 9 Penang Road, near Orchard Road.
The mixed-use project will have two wings comprising eight levels of office space, amounting to about 352,000 sq ft of net lettable area and one 15,000 sq ft floor for retail.
There will also be cycle paths around the building, along with bicycle parking facilities and shower rooms.
SingHaiyi said yesterday that the development will cost about $800 million. The land lease of the site has also been extended to 99 years.
The former Park Mall became the go-to place for shoppers looking for furniture when it changed its focus from fashion in 1995.
It was sold by Suntec Real Estate Investment Trust (Reit) in June 2015 for $411.8 million. The trust still holds a 30 per cent stake in the building.
Mr Desmond Sim, CBRE research head for Singapore and South-east Asia, said that while office demand is facing challenging times, Orchard Road has its own sources of demand and has relatively stable and low vacancy rates.
"The new building will be a breath of fresh air for Orchard Road as there has been no new supply in this sub-market for a period of time. There might be some 'musical chairs' as tenants in the area move to quality," he said.
Its location could be a "plus or minus; it is not right in the middle of the action, but it is well connected to the MRT."
Mr Sim said it was too early to project rental yields but added that office rents in Orchard Road are around $6.70 a sq ft each month.
Savills Singapore research head Alan Cheong said that SingHaiyi, being a Chinese company, could attract some mainland Internet companies to move into the building.
"I won't be surprised if Internet companies choose to relocate to Orchard as they want a campus-like atmosphere but have not reached a critical mass," he said.
"SingHaiyi could be able to draw in its network of Chinese Internet companies."
Mr Terence Ang, a corporate advisory partner who works in the Dhoby Ghaut area, said the mall would add retail and dining options to the "artsy area", where there is just Plaza Singapura for the moment.
"Hopefully, it will have a nice restaurant or two where I can take clients," he said.