Taste Orchard’s Termination Sparks a PR Test for Retail Brands
If you run stores in Asia, this is a wake-up call. The case exposes how fallout spreads to sub-tenants’ cash flow and expansion plans.
Tenants at Taste Orchard have been told to move out after the landlord ended the mall’s master lease early. Hao Mart, the master tenant, has proposed a settlement agreement that refunds security deposits within two months after tenants vacate. It also asks tenants to submit unamortized fit-out costs and estimated reinstatement costs. Waivers on reinstatement may be considered, but no promises have been made.
The landlord’s decision to end the deal means the premises must be vacated by December 31, 2025. A possible extension to Mar 31, 2026, is pending confirmation. OG had terminated Hao Mart’s lease after weak footfall and store closures. Tenants report revenue drops of 20-30% since BHC Chicken shut. Hao Mart’s anchor supermarket, Eccellente, is vacating.
If you run stores in Asia, this is a wake-up call. The case exposes how master lease structures can crack, and how quickly the fallout spreads to sub-tenants’ cash flow and expansion plans.
The master lease risk most leaders underrate
Hao Mart’s master tenancy was seven and a half years. It ended after 18 months, leaving 76% of the term unexpired. Sub-tenants, including Sushiro and Killiney Kopitiam, must now relocate even if they still have time left on their own agreements with the master tenant. This is a classic cascading risk in a layered lease stack.
Many companies assume a mall deal is safe if their sublease looks strong. In reality, sub-tenants are reliant on the master tenant’s financial health and alignment with the landlord. Protection is possible in some markets through recognition agreements or non-disturbance clauses, but these are often overlooked during site selection and negotiation.
Legal routes are not quick fixes. Commercial lease disputes cannot go to the Small Claims Tribunals in Singapore. They must be filed in the Magistrate’s Court for claims under SGD 60,000 (~US$44,000) or the District Court for SGD 60,000 to SGD 250,000 (~US$44,000 to ~US$184,000) as set out in commercial lease dispute guidance.
Hao Mart appointed Avista Advisory Partners to mediate talks. That reflects best practice for complex multi-party exits, but it does not erase operational disruption.
The money: fit-out, reinstatement, and deposits
The biggest near-term exposure is unamortized fit-out. Tenant improvements, like flooring, lights, and counters, are usually expensed over the lease term. If a lease ends early, the unamortized balance becomes a real loss. Guidance on tenant improvements and unexpired terms suggests a simple method: multiply the original fit-out cost by the days remaining, divided by the total days from installation to the original lease end. With only 18 months of trade in a seven and a half year plan, roughly 76% of the fit-out spend may be unrecovered.
Reinstatement is the next wildcard. Tenants have been asked to estimate the cost to return units to original condition. Landlords sometimes waive or reduce restoration to speed re-leasing if the market is tight, but Taste Orchard’s waivers are only “subject to assessment,” so teams should budget conservatively.
On deposits, Hao Mart’s proposal to refund after vacation is notable. In typical practice across Asia, landlords can hold deposits against unpaid rent, damage, and restoration, as outlined in security deposit norms. A refund is better than many breach scenarios, but it should be tied to clear timelines and conditions in writing. For context on the stakes, a basement unit of 20 thousand square feet in the mall was reportedly listed at SGD 180,000 (~US$132,000) per month before the termination.
PR Response Checklist for 30–60 Days:
- Align with finance and ops on the timeline and tone of all external messaging. Silence invites speculation.
- Audit all owned and partner channels to ensure consistent updates on store status, relocation plans, and customer service continuity.
- Prepare holding statements and media FAQs that frame the situation around transparency, empathy, and operational resilience.
- Coordinate with mall management and sub-tenants to manage on-ground signage and messaging, keeping customer trust intact during the transition.
- Activate loyalty and CRM campaigns early to preserve customer flow and sentiment while the brand repositions or relocates.
Leighton Cosseboom
Relocation in a market with tight supply but mixed demand
Despite this setback, the broader market favors active tenants. Singapore retail additions are averaging about half a million square feet per year from 2025 to 2029, well below the 10-year average of 0.8 million.
Prime Orchard rents rose 0.3% quarter over quarter in Q2 2025, with other city areas up 0.6%. Retail sales, however, were up only 0.6% year to date as of April after a 2.1% decline in 2024, showing demand is uneven. These figures signal a tight supply market that can still support rental growth, as captured in the latest retail market indicators.
New large-format supply is limited until 2028, when Bukit V Mall and the Tanglin Shopping Centre redevelopment open. That constraint favors quick movers. Food and beverage operators have the best odds, making up 50% of store openings in prime malls in the first half of 2025. Lifestyle brands built around curated experiences grew to 18% of openings, helped by moves like Muji doubling at Bugis Junction and Nitori taking over former department store space.
At the same time, landlords have reasons to reset. Asia Pacific commercial real estate investment surged 16% in Q3 2025 to US$38.1 billion, with Singapore among the leaders. Owners may accept near-term disruption to reconfigure prime assets around stronger experiential and F&B mixes.
How to avoid a repeat in your next deal
- Insist on landlord acknowledgments. In master lease situations, seek recognition agreements or non-disturbance terms that survive a master tenant default. Review assignments and subletting basics to understand your rights.
- Make real estate a C-suite decision. Most enterprises are centralizing oversight so footprint choices align with business strategy, a shift reflected in what senior leaders want from their real estate.
- Treat capex like an insurance policy. Bake amortization schedules, step-in rights, and termination scenarios into contracts before you spend on fit-out.
- Keep a relocation playbook. Maintain a ranked shortlist of alternative sites, a pop-up kit to preserve sales, and a fast-track hiring plan for redeployment.
- Use the market’s tightness. In a supply-constrained city, negotiate for restoration waivers, key money offsets, or rent-free periods, especially if you can fill gaps in a landlord’s desired mix.
Want to stay up-to-date on the stories shaping Asia's media, marketing, and comms industry? Subscribe to Mission Media for exclusive insights, campaign deep-dives, and actionable intel that reveal how craft, culture, and commerce move markets.
