| | | |  | | | Orchard Central | | | | | | | SINGAPORE : Far East Organisation wants to complete the construction on its Glutton's Square site along Somerset Road by the second half of 2008.
This was disclosed today as the developer unveiled plans for the project it had named Orchard Central.
Far East also told Channel NewsAsia that it is planning enhancements to a quarter of its existing retail assets.
Orchard Central will be a retail-only development, spanning 12 levels and yielding about 290,000 square feet of net lettable area.
On plans for the Somerset area, Far East said it will work closely with OCBC to integrate Orchard Central and the adjacent Specialists' Shopping Centre.
Last week, OCBC announced it was taking a 10% stake in the Glutton's Square project.
"Our boundaries have a lot of inter-facing and we are co-operating at all levels, including sharing of car park facilities, a joint taxi stand and drop off point. Obviously, there are many boundary issues and also right of passage through their land. So 10 percent is just a friendly gesture I think," said Vivienne Tan, president of Far East Consultancy.
Far East will not disclose a reciprocal stake in Specialists' Shopping Centre but some consultants told Channel NewsAsia recently that equity cross holdings are likely.
They said Orchard Central will enjoy decent yields.
Based on the total development costs of $650 million, some consultants calculated that Far East must command an average rent of $15 per square foot per month to achieve a net yield of 5 percent. This is comparable to the $10 to $15 per square foot target that CapitaMall and CapitaCommercial Trust have set for themselves for the refurbished Raffles City.
Far East also said it is open to working with Australia's Lend Lease which put in the top bid for the Somerset Central site.
And in line with the trend of enhancing retail assets, Far East said it has such plans for a quarter of its portfolio.
"We are certainly doing something about some of the older projects that we have, like Riverside Point, Ginza Plaza, Lucky Chinatown and perhaps even Pacific Plaza. We see demand coming up," said Tan.
"For a long time, Riverside Point was languishing in the Clarke Quay area. The river didn't really come to life. But if you see what's happening recently, we have done a good job at Clarke Quay, the whole area is bustling," she added.
Far East has a portfolio of 1.4 million square feet of retail space.
- CNA /ls
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