SINGAPORE: A new mall in Changi that has remained empty since obtaining a Temporary Occupancy Permit (TOP) in December 2019 has been put up for sale.
The Liv @ Changi Shopping Center, along Upper Changi Road North, is being marketed as a “brand new three-story freehold commercial building” by real estate services company CBRE.
It is located opposite Changi Prison and is surrounded by private residential quarters.
The indicative price for the building is S $ 38 million, or S $ 2,000 per square foot on gross floor area, CBRE said in a March 16 press release. The building sits on a site measuring approximately 13,561 square feet.
READ: Hit by circuit breaker and tenant restrictions, new Changi mall is still empty 9 months after it was built
UKTN first reported the empty mall in September last year, when its developer Fortune Assets Changi said it was struggling to attract tenants due to planning restrictions and the COVID-19 pandemic .
The “circuit breaker” measures in April last year had affected the rental of retail space, while restrictions by the Urban Redevelopment Authority (URA) prevented the developer from bringing in “desired trades” such as cafes and restaurants.
In February 2019, URA rejected the developer’s request to turn six first- and second-floor stores into restaurants to “protect the amenities of surrounding residents.”
URA later told UKTN that the mall was not allowed to have restaurants due to residents’ comments about traffic and parking issues.
READ: Empty Changi Mall not allowed to have restaurants due to resident traffic, parking comments: URA
Residents who live near the mall told UKTN last year that they were eagerly awaiting its opening for their daily needs. A resident was hoping for a nearby supermarket, pointing out that the closest stores were in Loyang.
The lack of retail facilities and amenities in the neighborhood means the building can accommodate a primary tenant such as a supermarket and other complementary trades such as health and beauty product retailers, daycares, centers fitness and clinics, said Clemence Lee, senior director of financial markets at CBRE.
“Alternatively, the building can also be used for offices, business schools and associations, subject to the approval of the relevant authorities,” he said in the press release.
CBRE declined to comment when asked why the building was being sold, citing the ongoing sale exercise. The parties must express their interest in purchasing the property by April 28.
If the mall is vacant, the sales process is usually short, said Steven Tan, senior director of investment services at Colliers. He told UKTN that the process of ensuring the building meets relevant requirements could be completed three months after signing the sale and purchase contract.
READ: Retail sales in Singapore up 5.2% in February, boosted by Chinese New Year celebrations
Mr Tan said the developer may have decided to sell the property as it may be some time before retail activity returns to pre-pandemic levels.
While retail sales rose 5.2 percent year-over-year in February, this is still a decline of 1.6 percent from the previous month on a seasonally adjusted basis.
“It might take some time before everything is back to normal; the developer may have felt that instead of waiting for the crisis, it might be appropriate to build on the current positive investment sentiment to monetize the asset, ”Mr. Tan said.
“There are also potential investors who have the resources to better reposition the property to maximize value.”
The struggle to attract tenants could also have been too difficult, with Tan emphasizing that the mall cannot have food and drink outlets to attract shoppers.
“Although there is a residential watershed, attendance is limited as it is not located near a key transport node or an MRT station,” he added.
Mr Lee said Upper Changi and Tampines MRT stations are “a short bus ride away”, with “many bus services” stopping along Upper Changi Road North.
“The property will also be able to capitalize on its proximity to several megaprojects such as Changi East Industrial Zone, Changi Town and Changi East Urban District,” he added.
“The successful purchaser will also benefit from the potential naming and signage rights of the building.”
Mr. Tan expects the buyer to woo tenants who provide catering retail services to residents, such as educational centers, spas and salons.
THE “ABOUT TIME” MALL IS SOLD
Resident T Prema, who lives in a condominium next to the mall, told UKTN it was “about time” for the mall to go up for sale.
“As a resident in an area that is far short of amenities, all I want is the mall to be occupied as soon as possible,” said the 62-year-old retiree.
“It’s a fairly densely populated area with eight to ten condos and lots of real estate, but our only convenience store is a convenience store at a gas station.”
Mdm Prema said residents were only asking for “shops typical of any mall in the neighborhood,” including a supermarket, laundromat, spa and ATMs.
She believes that the developer has had “a lot of time” to attract tenants, even in the current difficult climate.
“I find it hard to understand their struggles, especially given all the support the government has provided to businesses to stay afloat over the past year,” she said.
Mdm Prema said the neighborhood is now a “thriving residential area, not just the home of the Selarang prison and camp”.
“Perhaps the URA can also be more flexible and understanding by not limiting the type of tenants that can be brought in,” she added.