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Saturday, October 27, 2007

On to second phase

By The Star

Jaya 33 to build new corporate block after earlier success

Sdn Bhd is on to the next stage of its development in Section 13, Petaling Jaya now that its first phase, Jaya33, is about 100% leased out.

Its managing director Che King Tow says the new corporate office block Plaza 33, will be located on a former paint factory. At 2.3 acres, the new project will be about half the size of Jaya33, which sits on a 4.1-acre site, previously a feedmeal factory.

Jaya 33 Sdn Bhd general manager Tan Kok Leong says Italian Kitchen and French restaurant Bruno will be occupying space in Jaya33 by year-end.

The change from factory premises to commercial office blocks underscores the change of land use in that area by local authorities. Land scarcity, the growing popularity of the Petaling Jaya suburb has made Section 13, at one time an industrial area, far too valuable to remain a huge factory or warehouse site. The area goes back several decades and many of the premises there are rather old, says a source familiar with that area.

“The area is far too valuable to remain as a huge tract of land dotted by factories,” he says.

More factories are expected to move out in the coming years to pave the way for new land use, he says.

Jaya 33 Sdn Bhd's move to change the paint factory into Grade A office space was among the first of such moves to convert the land. It has succeeded in attracting quality multi-national companies (MNCs) into Jaya33. The shortage of prime office space in Petaling Jaya suburb has also boosted its position.

Che says: “We want to leverage on what we have invested in Jaya 33.”

When Che first announced the move to have the three-tower block development in 2004, their initial plans were to sell what he called Petaling Jaya’s first hyperoffice. At that time, hypermarkets, as opposed to supermarkets, were the trend in the retail market. Taking the queue from there, Che coined the term “hyperoffice” with floor plates of about 15,000 sq ft.

The initial plan was to sell the space, the two retail podium floors, the two 12-storey blocks and a 17-storey block. The company eventually decided to lease out the place to have a recurring income.

There were several reasons for this.

Most MNCs, keen to take up space in Jaya33, were not interested to manage the property. They wanted to concentrate on the business they know best, be it pharmaceuticals, insurance or marketing electrical goods. They prefer to rent and have someone manage the place for them, which include overall maintenance of the place, security, parking and utilities.

Recalls Che: “There were three issues. Having the location was not enough. Design and the presence of a single building management were important.”

When True Fitness took up half of its retail podium of about 70,000 sq ft, Jaya33 again took new direction. Prior to the emergence of gyms and wellness clubs, an office block was essentially just that. With the emergence of the gym business, corporate office blocks took on a new lifestyle element.

Even at the beginning, Che had made allocation for a swimming pool. With True Fitness, a spa was thrown in to complement both the pool and exercise club.

The next issue was food and beverage (F&B); corporate offices need options and choices with different price points. Variety comes with Chinese, Japanese and Vietnamese fare. Italian Kitchen and French restaurant Bruno will also be occupying space there by the end of the year, says Jaya33 general manager Tan Kok Leong. Both F&B outlets are in the process of a fit-out at the moment.

Next came the need for a community supermarket. Che is quick to add that he is not running a shopping mall. “The requirements of the modern office today are more than just office space. It must be an office space with a lifestyle feel,” he says.

“What we have today are retail elements that support our corporate offices. F&B takes up between 20% and 25% of our retail podium space. Grocer 33, to be run by the Teng family, formerly the management of TMC mini-market in Bangsar, will take up 10% (15,000 sq ft), and True Fitness 70,000 sq ft.”

Che and his team are thrilled at how things have turned out at Jaya33. What was initially envisioned as car show rooms and hyper-sized digital and computer outlets have turned out for the better.

“We want to leverage on what we have built and put together. There are so many amenities just across Jalan Semangat. Branches of most of the banks are there. In terms of F&B, we have added a considerable amount of choices. We want a building that is alive, not only during office hours, but also after office hours and during the weekends,” Che says.

Whether the 1,000 car parking bays are sufficient or not is a moot point. Che says it will be enough for the weekend and after-office crowd. The new project he and his team will be undertaking, Plaza 33, will have 900 parking bays. The two blocks will be linked via a bridge.

Che says it will be a Grade A corporate office and will comprise a 16-storey and a 25-storey block. That project is expected to have a gross development value of RM500mil.

The land was bought about three months ago at double the cost of the land for Jaya33. The Jaya33 land cost RM100 per sq ft.

The change in land use in Section 13 is expected to have a spillover effect into Section 19. Besides Jaya33, Jaya One (by Tetap Tiara Sdn Bhd) in Section 13 and 3 2 Square (Seri Tegamas Sdn Bhd, a subsidiary of Crest Builder Holdings Bhd) in Section 19, are near completion. Jaya One is a 10.8-acre RM450mil mixed commercial, entertainment and lifestyle development while 3 2 Square will have 200 office suits and 40 retail outlets.

Both 3 2 Square and Jaya One are located less than 1km away from Jaya33. Besides the conversion of industrial land to commercial use, Section 14 town centre, located across Jalan Semangat diagonally fronting Jaya33, is also expected to evolve with the demolishing of Jaya Supermarket next February.

It will be replaced with a seven-storey retail block and four levels of basement car park. Jaya Supermarket is about 30 years old today. Although the building has been refurbished about a decade ago, the lack of parking and the design of the building have put it at a disadvantage with the emergence of new malls, particularly in Bandar Utama.

Che says the move bodes well for the town centre and will add to the vibrancy of the area. For the next several years, 33 Grocer in Jaya33 will be able to serve the Section 14 community when it opens by the end of this year.

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