Bedok Point mall, faced with stiff competition, to make way for residential-commercial development
SINGAPORE: The Bedok Point mall will make way for a residential development with commercial units on the ground floor, owner Frasers Property has confirmed.
Frasers Property said in its financial results in May that it has been granted provisional permission by the Urban Redevelopment Authority (URA) to redevelop the mall into a mixed-use development.
"We are currently working with the relevant authorities on our plans and will share the details when our plans are ready," a Frasers Property spokesperson told CNA.
The spokesperson did not give a reason for the redevelopment or a timeline for the project.
"We are looking to create a sustainable, safe and adaptable environment that enjoys greater connectivity and accessibility," the spokesperson added.
Bedok Point mall tenants CNA spoke to said they were informed about the redevelopment plans earlier this year but have not been given a definitive timeline, although they suggested that it could happen early next year.
The redevelopment was bound to happen as poor footfall at the mall means business has not been good, the tenants said.
Bedok Point is further away from the MRT station and bus interchange than Bedok Mall, a bigger and more diverse shopping centre with residential units above, they added.
"Existing tenants will be notified in advance on our redevelopment plans so that they are able to make their necessary business continuity plans," the Frasers Property spokesperson said.
UNABLE TO BECOME DOMINANT MALL IN BEDOK
The redevelopment comes after Frasers Property bought Bedok Point from one of its real estate investment trusts, Frasers Centrepoint Trust (FCT).
At FCT's extraordinary general meeting in September last year, shareholders questioned why Bedok Point was sold for S$108 million when it was bought in 2011 for S$129 million.
In response, FCT's manager said Bedok Point was acquired in 2011 "for a consideration of S$127 million", adding that the mall's size constraint and the lack of direct connectivity to key transportation nodes "limited its ability to be the dominant mall within Bedok town centre".
"Over the years, the manager has focused on proactive leasing and re-positioning strategies to stabilise its performance," the manager added, according to a copy of the meeting minutes obtained by CNA.
"This was as competition intensified due to new competing retail offering which is larger and better located within its immediate catchment."
The manager highlighted that Bedok Point has achieved occupancy of above 90 per cent at the time, but "remains challenged" especially with the COVID-19 pandemic.
TENANTS UNSURE OF FUTURE PLANS
Mr Jackson Lee, owner of optical and eyewear shop Trendy Eyes in Bedok Point, called the redevelopment plans an "open secret" as business has been "very quiet".
While the 43-year-old said rental fees have been manageable, the lack of customers means he was "not really getting much of a value".
"Bedok Point's location definitely loses to Bedok Mall, which is at the transport nodes," he said, conceding that Bedok Point is "slightly out of the way".
"In terms of offerings, Bedok Point doesn't really have strong anchor tenants. The mall is not really doing much to attract people."
When the redevelopment happens, Mr Lee said he has "no choice but to search for an alternative place". He plans to stay in the Bedok area where most of his regular customers are.
"We checked Eastpoint Mall (in Simei) because it is also under Frasers Property, but the rental is a bit unfriendly," he said.
Mr Lee hopes Frasers Property will let tenants know early once the plans are finalised. "So far, they have been (quite quiet) about it," he added.
Ms Wendy Hsu, who runs Xiang Xiang Traditional Taiwanese Cuisine, believes tenants will be notified 30 days in advance of the final plans.
Ms Hsu, who is in her 50s, said she plans to stay in Bedok Point until the end of the year when her lease expires, but has not thought about where she will go next.
The restaurant only has one outlet in Singapore, and has been at Bedok Point for almost three years.
While Ms Hsu acknowledged that Bedok Point's less accessible location makes it "quiet" compared to Bedok Mall, she said her restaurant managed to get good reviews from prominent food critics, leading to more customers.
"The tenants in this mall keep changing; we are the ones who stayed here the longest. It's definitely not easy," she said.
Ms Hsu said she does not feel sad that she might have to leave Bedok Point, noting that the writing was already on the wall after the mall was sold.
"The journey is quite tough but we are also happy that we managed to so-called survive here and are doing quite okay," she said.
She added that it remains to be seen whether the redevelopment will start early next year, pointing to how the pandemic has created a labour crunch in the construction industry.
"I think most likely it will be delayed," she said.
The manager of a shop on the fourth floor of Bedok Point said business has been "not so good" with rental fees being "too high".
"I can move, but I need to finish my two-year contract first," said the 25-year-old, who requested that he and his shop not be identified. "Once Bedok Point closes then I will think (about where to go)."
REDEVELOPMENT COULD TAKE FOUR YEARS
Ms Pearl Lok, an analyst with real estate services company Colliers, told CNA that displaced tenants in Bedok Point could be offered spaces in other malls within Frasers Property's portfolio, with fresh negotiations between the tenants and the landlord.
"Most typical tenancies could have redevelopment clauses that allow landlords to serve notice for these tenants to vacate the property (if) a redevelopment was to take place," said Ms Lok, who is director of capital markets and investment services at Colliers.
"Alternatively, landlords may also allow the rental leases to expire before the redevelopment takes place."
READ: Singapore retail sales surge 54% in April after store closures during last year's circuit breaker period
Ms Lok said depending on the complexity, a typical redevelopment project could take three to four years, including demolition and construction.
"The timeline may be deferred due to the current shortage of manpower and materials in the construction industry," she added.
Elaborating on the possible reasons behind the redevelopment, Ms Lok said Bedok Point might not have the "critical mass to attract a similar catchment" as the newer and larger Bedok Mall.
"Additionally, Bedok Point was not able to enjoy the convenience of direct access to the bus interchange and MRT station, where commuters transit and can pick up items before they move to the next location," she suggested.
RESIDENTIAL DEVELOPMENT MORE ATTRACTIVE
Ms Lok said a residential-commercial development could fare better as the mall sits in an "attractive location in the heart of the action in Bedok", near amenities like food centres, polyclinic, mall and main transport nodes.
"It is most suitable for young families, as numerous primary schools are within a 1km radius from the site," she added.
URA's master plan indicates that the site at 799 New Upper Changi Road, where Bedok Point is located, is to be used mainly for commercial development. It is unclear why a residential-commercial development was provisionally approved for the site.
URA does not comment on provisional permissions, but uploads details of final written permissions on its website.
READ: URA may review tenant restrictions for empty Changi mall if area shows 'changes to circumstances'
Ms Lok said the next steps for Frasers Property would be to sort out any conditions set out in the provisional permission, before consulting relevant authorities to address any concerns, including topping up for a fresh 99-year lease.
"After which, developers would then submit for the grant of Written Permission and make the necessary payments to the authorities," she said.