Department store OG takes anchor tenant Hao Mart to court

Iconic department store operator OG has commenced legal action against Hao Mart, seeking about S$6.6 million in damages over an alleged breach of lease at Taste Orchard along Orchard Road. The dispute reportedly centres on Hao Mart’s tenancy obligations as an anchor tenant within the revamped retail concept.

While the full details will be ventilated in court, the case underscores the importance of clear leasing structures, well-drafted anchor tenant clauses and realistic ramp-up expectations for new retail concepts in a still-normalising consumer landscape.

Key issues highlighted by the dispute

Although every lease is unique, cases like this often revolve around a few recurring themes:

• Anchor tenant obligations: fit-out timelines, minimum trading hours and marketing participation.
• Rental structure: base rent vs turnover rent and whether performance triggers were clearly defined.
• Hand-over and operational readiness: condition of premises and delays in opening.
• Exit and termination clauses: early termination, remedies and liquidated damages.

What this means for landlords, tenants and investors

For landlords, the case is a reminder to conduct careful due diligence on tenant covenant strength, business model and funding, particularly for large-format or anchor tenants. For tenants, it reinforces the need to fully understand performance-linked clauses, make realistic sales projections and ensure sufficient working capital before committing to multi-year Orchard Road leases.

Investors reviewing strata retail, shophouses or mixed-use assets can also draw lessons from this episode: lease quality and tenant mix often matter more than headline rental levels, especially in a rapidly evolving retail landscape.

Disclaimer: This article is a general market commentary based on publicly reported information. It does not constitute legal advice. Parties facing specific tenancy or lease disputes should seek independent legal counsel.