Orchard malls not biting on grants for underground links

URA incentive scheme extended, but hesitant mall owners cite high costs

An underground linkway between Orchard Central and The Centrepoint.

You would think that malls along Orchard Road would jump at the chance to build underground links to each other - especially when there are cash grants on offer for this.

A scheme to do precisely this has been extended, but developers are still not biting.

Even so, the Urban Redevelopment Authority (URA) is gathering feedback from industry players on how it can provide more incentives to building owners to provide underground links.

"The Government is also studying and reviewing legislation on mandating existing developments to receive new elevated and underground links," a URA spokesman said.

The incentive, started in 2004 by URA , gives owners and developers cash grants - up to $28,700 per sq m - for the construction of underground walkways. A URA circular last month stated that the scheme has been extended to March 2018.

Mall operators, property and retail experts, and the the Orchard Road Business Association (Orba) said there are several challenges in the way of such links, with cost being the biggest.

Within Orchard Road, URA has helped to defray the costs of just one link - that for a new underground link being built at Scotts Square. Other links, such as the one between ION Orchard and Wheelock Place, were included as part of the sales conditions when the sites for the malls were sold.

Explaining the challenge of the high costs for an underground link, Cushman & Wakefield research director Christine Li said: "After it's built, malls have to manage it. It's an open space that can't be locked up. It incurs lots of costs."

Orba executive director Steven Goh was quoted in Chinese daily Lianhe Zaobao on Sunday as saying that underground structures are complex, and that their costs have always been high. "Unforeseeable circumstances may also increase costs by two-fold. This makes many (building) owners hesitate," he said.

Aside from financial factors, there are also structural and technical concerns to look into, said a spokesman for OUE Hospitality Reit Management, which owns Mandarin Gallery. She added that feasibility studies would need to be conducted as "these links would need to connect various existing buildings".

Mandarin Gallery is one of 12 Orchard Road locations identified by URA for possible underground links. None of the proposed linkways have materialised.

Head of research for Singapore at JLL Tay Huey Ying said such links "require much coordination and the effort and time spent far outweigh the benefits of constructing the links". Another factor experts pointed to was the fear that visitors could be funnelled to competitors.

Currently, there are about 2.5km of underground pedestrian links already in place.

Despite the challenges, Adjunct Associate Professor Lynda Wee from Nanyang Technological University's Nanyang Business School said there is still value in building these links. "With underpasses, malls can be integrated so you can walk from one mall to another without realising it," she said.

Ms Valerie Toh, 29, an office manager, hopes the links will be built. "When it rains and there is no sheltered linkway, people always have to run from building to building if they don't have umbrellas."

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A version of this article appeared in the print edition of The Straits Times on April 27, 2016, with the headline Orchard malls not biting on grants for underground links. Subscribe