ST : John Little to leave Orchard Rd site

Apr 15, 2010

John Little to leave Orchard Rd site

Move is part of ongoing review of all store locations, says retailer

By Esther Teo

RETAILER John Little, part of the Robinsons Group, says it will soon vacate its seven-storey Orchard Road outlet.

This means the large pool of new retail space set to come onstream later this year will grow even bigger.

The move by the retailer confirms months of speculation after it failed to exercise its option as a tenant to renew its lease with landlord OG late last year, as reported by The Straits Times in January.

Existing tenants often have priority in renewing a lease if it is within a contract's agreed terms.

John Little said its decision to relocate its Somerset branch was part of an ongoing review of all its store locations. It has not revealed the location of its new store.

'We already have presence along the main Orchard Road and Marina shopping belts as well as in the heartland areas, so it is timely for us to review our store locations to ensure we can bring the John Little proposition to different parts of the island,' a Robinsons Group spokesman said. He added that existing staff will be relocated to a different outlet.

John Little has other stores at Marina Square, Plaza Singapura, Causeway Point and Jurong Point.

The Robinsons Group includes the Robinsons and Marks & Spencer department stores. John Little moved to the OG premises in 2007 from the Specialists' Shopping Centre, across the street, which has since been redeveloped.

An OG spokesman said it is in talks with a few potential tenants, both local and foreign, from various industries.

'But nothing is confirmed as of yet, so we are still open to offers... We are confident of finding a new tenant before John Little moves out because the Somerset site is close to the MRT and is also increasingly gaining popularity with shoppers.'

OG is looking for a whole or partial building tenancy with a guide price of $10 per sq ft (psf). The rent for leasing the whole building will be about $443,150 a month, the spokesman added. The tenant gets naming rights to the building.

John Little is the sole tenant in the Orchard OG Building, with a three-year lease expiring on May 16. The building, opposite 313@Somerset, is on freehold land with a gross floor area of 44,315 sq ft. It was last refurbished in 1992.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the guide price is reasonable. He is fairly optimistic the building would be leased since the local retail scene is looking positive, with an expected increase in tourist numbers.

'But this is a huge space and finding a tenant to fill this space might be a challenge. Yet, carving it up would mean losing retail space to corridors, more tenants to manage and renovation costs for the landlord,' he added.

Ms Chua Chor Hoon, DTZ's head of South-east Asia research, noted in a report that retail rents held firm last quarter, despite new supply coming onstream last year and in the first quarter this year.

A decline in prime retail rents over recent quarters looks set to bottom out as the economic recovery gathers pace and consumer confidence rebounds, experts say. Ms Chua predicts a moderate rise in prime retail rents this year.

The estimated 2.3 million sq ft of new retail space set to come onstream this year is 15 per cent down on the 2.7 million sq ft of new supply last year, she said.

Youth-themed mall *Scape in Somerset Road has announced that tenants have committed to 80 per cent of the space ahead of its June opening. And the basement link from Raffles City to Esplanade, due to open in July, is said to be more than 63 per cent pre-let.

OG, a family-run firm, is one of Singapore's oldest department stores. The company also owns office and retail properties in Albert Street and at People's Park and Orchard Point.

esthert@sph.com.sg


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For lease

· Landlord OG is looking for a whole or partial tenancy for the Orchard OG Building. The guide price is $10 per sq ft.

· The building is opposite 313@Somerset. It is on freehold land with a gross floor area of 44,315 sq ft.

THE CHALLENGE

'Finding a tenant to fill this space might be a challenge. Yet, carving it up would mean losing retail space to corridors, more tenants to manage and renovation costs for the landlord.'

Ngee Ann Polytechnic real estate lecturer Nicholas Mak, on the huge retail space to be available after John Little moves out