Hao Mart hires firm to discuss termination with Taste Orchard tenants; experts say case is ‘unusual’

SINGAPORE - Supermarket chain Hao Mart has appointed a firm to meet tenants of Taste Orchard to discuss their concerns over the early termination of their leases, The Straits Times has learnt.

In a letter dated Sept 23 that was sent to the affected tenants of the Orchard Road mall, Avista Advisory Partners said it has been engaged by Hao Mart to assist in discussions regarding the lease termination.

The tenants were first notified by Hao Mart, their master tenant, in writing on Sept 12 that

their leases had been terminated by OG

, the landlord of the building, and they would have to vacate the premises by Dec 31, 2025. They would also have to return their units to their original condition, which worried many tenants as they had made substantial renovations.

“Hao Mart deeply values the professional and cooperative relationship it has built with the tenants (including yourself). We recognise the concerns you have highlighted in your communications to Hao Mart,” Avista, a business advisory firm, said in its letter, which was seen by ST.

“They are important to Hao Mart and we would like to explore them further with you. Given the urgency and importance of the matter, we would appreciate the opportunity to commence the dialogue at the earliest possible time.” 

Avista added that it will also communicate with OG to see what can be done.

OG told ST via e-mail on Sept 18 that it is “actively working with Hao Mart to ensure the smooth and orderly vacation of the premises by Dec 31”. It declined to elaborate, citing the need to “protect the integrity of the process and the privacy of those involved”.

Hao Mart did not respond to ST’s queries.

Before receiving Avista’s letter, tenants claimed both Hao Mart and OG were not communicative despite efforts in trying to contact them in the week after receiving the eviction notice.

Ms Adelene Fong, managing director of children’s coding school The Lab on the mall’s third floor, said that she had not heard from Hao Mart since contacting it initially: “They only replied that our questions had been duly noted. That’s it.”

She added that some of the other tenants had tried to initiate a meeting with OG to discuss the possibility of extending their leases, but to no avail.

Most of the tenants have already replied to Avista, she noted.

A food and beverage business owner at Taste Orchard, who declined to be named, said he had signed a three-year lease with Hao Mart as he was attracted by the idea of setting up shop in a full-fledged F&B concept mall in Orchard Road.

He had spent a five-figure sum to renovate his stall, and incurred significant losses in the past few months due to the poor footfall in the mall. As he has already built up a sizeable base of regular customers, he intends to bear the losses while finding a new unit in Orchard to move to.

“This is the worst thing to have happened in my 18 years of running an F&B business,” he said.

When Hao Mart closed its premium Eccellente supermarket in the basement in April and the space remained empty for months, the writing was on the wall for him.

“Hao Mart initially told us that there would be a new tenant taking over the basement, which could have rejuvenated the mall, but those plans ultimately fell through,” he said.

Mr William Yang, founder of tuition centre Huicai Education, said he had spent about $1 million on renovations for his unit on the fourth floor, which measures about 4,500 sq ft and opened in March 2025 on a three-year lease. He had asked Hao Mart if he could be compensated for the renovation costs.

ST understands that some of the tenants had been considering taking legal action prior to receiving the letter from Avista.

Mr Wong Tjen Wee, a lawyer at Baker McKenzie Wong & Leow who specialises in commercial litigation, said the affected tenants could claim for wrongful termination against Hao Mart, but this would hinge on the details of the lease agreement.

Mr Terence Yow, chairman of Singapore Tenants United for Fairness, recommended that all tenants in commercial retail spaces first familiarise themselves with the Fair Tenancy Code of Conduct for Leasing of Retail Premises in Singapore, and how it applies to their specific lease agreements.

Unprecedented, unusual case

OG’s termination of Hao Mart’s lease as the master tenant at Taste Orchard could well be unprecedented, due to the far-reaching consequences and lack of information, experts say.

Hao Mart’s lease was terminated just slightly over 18 months into a 7½-year lease, which in turn affected sub-tenants that signed leases with the supermarket chain. It might be the first known case of a landlord evicting its anchor tenant, they added.

While there have been some high-profile cases of anchor tenants leaving their premises before the end of their leases, such as department store Robinsons at Raffles City in 2021 and cinema operator Cathay Cineplexes at the former Cathay Building in 2022, these happened of the tenants’ own accord due to financial troubles that led to their liquidation.

There is a very small scope of legal grounds for OG as the landlord to terminate its anchor tenant’s lease, experts say.

“Early termination rights are typically reserved for landlords in cases of major redevelopment, asset enhancement, or reconfiguration works requiring vacant possession,” said Mr Ethan Hsu, head of retail at Knight Frank.

He added that landlords would typically have to give at least six months’ notice, and disclose such rights upfront before signing the lease. They would also have to compensate tenants for their fit-out costs.

Mr Wong of Baker McKenzie Wong & Leow said such lease agreements may also allow for “no-fault” termination by the landlord, if it wishes to reclaim the premises for redevelopment of the property. The other possible legal reason for a premature lease termination would be a breach of contract, like tenants defaulting on obligations such as rent payment or unauthorised usage, he said.

Reasons for the sudden lease termination at Taste Orchard have not been made public.

According to documents filed with the Accounting and Corporate Regulatory Authority (Acra), Hao Mart has been in the red since 2023. It recorded a $32.8 million loss for the financial year ended March 31, 2024, widening from its $23.2 million loss in 2023.

Revenue also fell 33.8 per cent, from $84.2 million in 2023 to $55.7 million in 2024.

Hao Mart is a subsidiary of Hao Corp, which is owned by Dr Tan Kim Yong. His son Justin Tan is also listed as a director of Hao Mart, according to document filings.

Dr Tan delisted his other company Advanced Integrated Manufacturing via Hao Corp in 2016, 11 years after he first brought the company to list on the mainboard of the Singapore Exchange.

The electronics manufacturing company recorded a loss of US$10.4 million (S$13.4 million) for the financial year ended March 31, 2024. Both companies have yet to file their financial results for the last financial year.

Mr Nicholas Mak, chief research officer at property portal Mogul, said the Taste Orchard case is unusual as it could have been avoided in the first place.

“Typically, landlords would have done their due diligence before they take on the master tenant, to ensure their financial soundness and also the viability of their proposed business concept.”

Hao Mart’s 7½-year lease was also a strange one, Mr Mak said, as such long contracts are typically reserved only for big established brands that have a good track record, such as internationally known retailers like Takashimaya and Isetan.

“Usually landlords would let the master or anchor tenant complete the duration of their first lease – typically around two to three years – before deciding if they want to renew with them.”

Hao Mart, which runs 20 supermarkets islandwide, took over the building at 160 Orchard Road in February 2024. Previously, the space had been used by department store OG for 18 years before it closed in October 2022.

The mall was relaunched as Taste Orchard, billed as a five-storey F&B haven across more than 155,000 sq ft of retail space that included Hao Mart’s Eccellente supermarket on three storeys.

Professor Lee Kwan Ok of the National University of Singapore’s real estate department said the master tenant model adopted by Hao Mart carried immense risk and may not have been sustainable.

A master tenant of a shopping mall typically has to pay the head rent; fund capital expenditure, fit-outs and marketing for the mall; and arbitrage sub-tenant rents while ensuring occupancy and revenue for the mall are high.

“When the tenant curation and marketing underperform, the spread compresses and the model turns fragile,” said Prof Lee, noting that Taste Orchard’s large-format basement space required robust programming to pull in customer traffic.

Dark clouds over parts of Orchard Road

The mall’s poor performance could be attributed to both inherent troubles as well as greater economic headwinds that are impacting retail malls in Orchard Road, experts say.

The Orchard Road Business Association declined to comment for this story.

Knight Frank’s Mr Hsu said Taste Orchard is sited slightly away from the prime shopping belt of Orchard Road, making it harder to capture consistent footfall without a strong anchor concept or distinctive trade mix, compared with neigbouring malls like 313@Somerset and The Centrepoint that offer greater scale of retail and F&B offerings.

For example, Lendlease, which operates and manages 313@Somerset, reported a fall in committed occupancy at the mall to 98.8 per cent as at June 30 2025, down from 99.9 per cent in the same period a year ago.

Mr Hsu noted that on paper, Taste Orchard’s food haven concept anchored by a three-storey supermarket should work. But its downtown location actually presented more structural challenges than benefits, as grocery retail tends to perform better in residential locations.

Japanese supermarket Don Don Donki’s 24-hour concept across the road at Orchard Central, and FairPrice Finest’s supermarket-plus-lifestyle model at The Centrepoint next door already dominate that space in the Orchard area, making it difficult for Hao Mart to compete, he said.

Local supermarket chain Sheng Siong also made its Orchard debut at the basement of The Cathay in August 2025.

Shopping malls in Orchard Road cannot simply depend on their location for footfall, said Mr Mak of Mogul. Instead, they would need to have unique selling points and market them effectively.

He noted that Orchard Road, once Singapore’s prime shopping district, has lost its shine in the last decade not just with local shoppers but tourists too, who can now enjoy bigger, shinier malls in their home countries that better cater to local tastes.

Prof Lee described Orchard Road as a “two-speed market”, comprising prime, well-curated assets that are resilient alongside concepts that have “weak positioning, awareness or tenanting struggle”.

She said Taste Orchard’s problems could be attributed to a combination of weak concept, curation and execution, at a time when there is an oversupply of F&B businesses as consumers spend less.

Rental increases in Orchard have also been a bane for retail and F&B businesses, leading to a high churn of such operators.

For the Orchard district, research from Mogul shows a wide range of median rental rate changes from the second quarter of 2023 to the second quarter of 2025.

Basement units between 30 sq m and 100 sq m saw the biggest increase at 50.6 per cent, with median rental rates at $26.44 per sq ft (psf). Larger basement units saw a 22.3 per cent drop at $14.18 psf.

However, rental rates for ground floor units dropped between 11.3 per cent and 31.1 per cent, going for $10.64 psf to $19.56 psf.

Taste Orchard’s 20,000 sq ft basement unit was reportedly listed at $180,000 a month – a fair pricing but still likely unsustainable for most tenants due to the low footfall, experts say.