Rent Rebates Offers as Tenant Incentive at New Malls

Orchard Central Mall is scheduled to open in early June and has cut its rent by 10% to 30% in an effort to lure tenants on a case-by-case basis to do so. Its one of the latest malls to do so with Ion Orchard Mall announcing last month that it would offer up to 30% in rental rebates for stores ready to open shop by July.

Orchard Central Mall currently has a 65% occupancy rate and hopes to have this increased by offering rent incentives in an effort to promote business. Other malls known to offer similar incentives include Tampines 1 Mall and Iluma Mall. And these incentives have certainly showed some results.

These moves certainly add a new tweak to former old-school landlord’s stance on older buildings. In light of this push for blanket rent reductions led by the Singapore Retailer’s Association, mall owners are standing firm. Far East Organization, who is building Orchard Central mall, has hesitated in offering cuts to more than a handful of tenants, usually those who signed leases when rents were at an all time high, or to those who hold larger units. Ms. Susan Leng who is director of retail management at Orchard Central advised that it is not equitable to give rental cuts across the board. It is the smaller stores who are crying out for help who have been given these deals a they say their sales have dipped to such an extent that they need rent cuts to stay open.

Orchard Central is Singapore’s first new mall to be opened in its busting shopping strip in more than 10 years and boasts attractions such as an indoor rock-climbing wall, $9 million worth of art work splattered across the mall, 213,000 square feet of shopping space and 259 shops.