Parco to quit Millenia Walk after losses
JAPANESE mall and department-store operator Parco will be vacating its 83,000 sq ft premises at Millenia Walk late next month, after racking up losses over the years which run to millions of dollars.
The Business Times understands that its lease ends in March and that it is looking to continue operations in another mall, though this is likely to be on a smaller scale, with about 10,000 sq ft of space to accommodate its eatery operations.
These are largely located on the third level of the department store now, said to be the only part of Parco that is doing well.
Pontiac Land Group, which owns and manages Millenia Walk, is in the midst of working out plans for the space that Parco will leave behind. It revealed that no other tenant was leaving apart from Parco.
The talk in the market is that Pontiac is considering converting the retail space for hotel use, as those it owns in the area, such as Conrad Centennial Singapore and the Ritz Carlton Millenia Singapore, have been performing well.
The site Millenia Walk sits on is the same parcel of land that houses the Ritz Carlton and Conrad Centennial Singapore. It has been zoned for hotel use under Master Plan 2008.
But Mr Michael Su, chief executive of Pontiac Land, dismissed such talk, saying: "We view retail as a viable business and, with Parco's departure, we are taking this opportunity to reposition our mall."
Parco's departure from Millenia Walk comes after it chalked up millions of dollars in losses after tax from continuing operations each year since it moved to the mall in 2010.
In 2011, it incurred as much as $8.7 million in losses, filings with the Accounting and Corporate Regulatory Authority showed. In 2012, it made a loss of $3.4 million.
Its performance over the past few years contrasts sharply to when it first started here in 1995.
At that time, it managed what was known as the Parco Bugis Junction shopping complex and a department store at the mall.
Some market observers had predicted that it would not do well, but Parco Bugis Junction managed to register sales of $110 million in its first full year and more than $22 million in rental revenue.
Parco sold its stake in Bugis Junction in 2005, and was the appointed retail manager for The Central mall at Clarke Quay between 2006 and 2009.
The Singapore department store is fully owned by Parco Company Limited, which has 19 stores in Japan, where it has built a strong reputation for creating bustling shopping complexes in unlikely locations.
Its store at Millenia Walk spans three floors, and includes popular ramen joints such as Keisuke Tokyo and Nantsuttei, and restaurants such as Saboten, Tomi Sushi and Ma Maison, which are located on the top floor.