SINGAPORE: A new mall in Changi that has remained empty since it was granted a Temporary Occupation Permit (TOP) in December 2019 has been put up for sale.
[email protected] mall along Upper Changi Road North is being marketed as a “brand new freehold three-storey commercial building” by real estate services company CBRE.
It is located across the road from Changi Prison and is surrounded by private residential neighbourhoods.
The building’s guide price is S$38 million, or S$2,000 per square foot on the gross floor area, CBRE said in a news release on Mar 16. The building sits on a site measuring about 13,561 sq ft.
READ: Hit by circuit breaker and tenant restrictions, new mall in Changi still empty 9 months after it was built
CNA first reported on the empty mall in September last year, when its developer Fortune Assets Changi said it struggled to attract tenants because of planning restrictions and the COVID-19 pandemic.
The “circuit breaker” measures in April last year had affected leasing of the retail spaces, while Urban Redevelopment Authority (URA) restrictions prevented the developer from bringing in “desired trades” like cafes and restaurants.
In February 2019, URA rejected the developer’s request to turn six shop units on the first and second floor into restaurants to “safeguard the amenities of the surrounding residents”.
URA later told CNA that the mall was not allowed to have restaurants due to residents’ feedback about traffic and parking problems.
READ: Empty mall in Changi not allowed to have restaurants due to residents’ traffic, parking feedback: URA
Residents who live near the mall told CNA last year that they had been looking forward to its opening for their everyday needs. One resident hoped for a supermarket nearby, pointing out that the nearest shops were in Loyang.
The lack of retail facilities and amenities in the neighbourhood means the building can host an anchor tenant like a supermarket and other complementary trades like health and beauty retailers, childcare facilities, fitness centres and clinics, CBRE senior director of capital markets Clemence Lee said.
“Alternatively, the building can also be used for offices, commercial schools and associations, subject to approval from relevant authorities,” he said in the news release.
CBRE declined to comment when asked why the building was being sold, citing the ongoing sale exercise. Parties must express interest in buying the property by Apr 28.
If the mall is vacant, the sale process is typically short, said Mr Steven Tan, senior director of investment services at Colliers. He told CNA that the process, which includes ensuring that the building complies with the relevant requirements, could be completed three months after the sale and purchase agreement is signed.
Mr Tan said the developer might have decided to sell the property as it could be some time before retail activity returns to pre-pandemic levels.
While retail sales grew by 5.2 per cent year-on-year in February, it is still a 1.6 per cent fall compared to the previous month on a seasonally adjusted basis.
“It could take a while before all goes back to normal; the developer may have taken the view that instead of waiting out the crisis, it could be timely to ride on the current positive investment sentiment to monetise the asset,” Mr Tan said.
“There are also possible investors who have resources to better reposition the property to maximise the value.”
The struggle to attract tenants could also have proved too much, with Mr Tan pointing out that the mall cannot have food and beverage outlets to attract shoppers.
“While there is a residential catchment, there is limited footfall as it is not located near a key transport node or MRT station,” he added.
Mr Lee said the Upper Changi and Tampines MRT stations are a “short bus ride away”, with “numerous bus services” stopping along Upper Changi Road North.
“The property will also be able to capitalise on its proximity to several mega projects such as Changi East Industrial Zone, Changi City and Changi East Urban District,” he added.
“The successful buyer will also enjoy potential naming and signage rights to the building.”
Mr Tan expects the buyer to woo tenants that offer retail services catering to residents, like education centres, spas and salons.
“ABOUT TIME” MALL IS SOLD
Resident T Prema, who lives in a condominium next to the mall, told CNA that it is “about time” the mall is put up for sale.
“As a resident in an area well short of amenities, all I want is for the mall to be occupied as soon as possible,” the 62-year-old retiree said.
“This is quite a densely populated area with eight to 10 condos and many landed properties, yet our only convenience store is a minimart at a petrol station.”
Mdm Prema said residents are only asking for the “typical shops at any neighbourhood mall”, including a supermarket, laundromat, spa and ATMs.
She believes the developer had “plenty of time” to attract tenants, even in the current difficult climate.
“I find it hard to understand their struggles, especially given all the support that the Government has provided to businesses to stay afloat over the past year,” she said.
Mdm Prema said the neighbourhood is now a “thriving residential zone, and not just home to the prison and Selarang Camp”.
“Perhaps URA can also be more flexible and understanding in not limiting the kind of tenants that can be brought in,” she added.