Recovery and rejuvenation a boost for Orchard Road and Cairnhill

Orchard and Cairnhill’s astronomical prices have peaked, according to Tong.

The Orchard Road shopping belt has been characterized by, and thrives on, the flow of Singapore’s international tourist arrivals. Unfortunately, the Tengah EC pandemic caused major upheaval to the industry — tourist arrivals dropped from 4.8 million people in 4Q2019 to just 158,000 in 4Q2020.

However, with the loosening of restrictions and resumption of international travel, the tourist numbers have rebounded to 2.6 million people in 4Q2022.

This is evident in the retail rents of the city. EdgeProp Singapore’s rental data shows that the islandwide rental fell from $11.08 psf per month in 2Q2020 to $9.01 psf pm in 1Q2022. Increased consumer confidence has driven this recovery with the December 2022 rates reaching $9.81 psf pm.

The lack of mainland Chinese tourists due to travel restrictions has caused some issues, however, earlier indications point to a steady return throughout 2023.

Surrounding Orchard Road are prime residential neighbourhoods such as Cairnhill, Newton, and the River Valley district. The area is well connected to multiple MRT stations and is close to some of Singapore’s top schools such as St Joseph’s Institution Junior, Singapore Chinese Girls’ School, and Catholic Junior College.

To enhance the vibrancy of the area, the Singapore government has developed a master plan which creates distinct zones along the shopping belt. This plan includes transforming the Somerset area into a youth destination and introducing family-friendly green spaces in Dhoby Ghaut.

Recent collective sales in the area, such as Tanglin Shopping Centre and Ming Arcade, have set new benchmarks for commercial properties.

With its locational attributes, Orchard Road is a popular residential choice for expatriates. 14 new private residential projects have been launched in the Cairnhill subzone within prime District 9 in the last five years.

The high prices of the private residential units in the area have decreased, however, due to competition from city-fringe and suburban areas. The average new launch price in the Core Central Region (CCR) was $2,697 psf in 1Q2018 while it had dropped to $2,899 psf in 1Q2023.

It is clear that the Orchard Road shopping belt is on the path to recovery and the future looks bright for the area. With the continued loosening of travel restrictions and the master plan being followed, the possibilities for this area are endless.