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Saturday, February 16, 2008

RM4b business within a year seen

YEE: KWC hopes to not only double the value of the current business but to grow exports to a level that puts foreign and local demand on equal footing

The developer of Kenanga Wholesale City (KWC), a one-stop centre for garment wholesalers, believes that within a year of operation, its tenants will have transacted business valued at RM4 billion.

KWC is a wholesale market concept akin to Dubai's Gold Souk. It is being developed in the Pudu area of Kuala Lumpur.

The building, when ready in 2010, is expected to house most of the wholesalers already in the Jalan Kenanga area (behind the Jalan Pudu Fire Station) and to rope in new ones too.

Built by Kenanga Wholesale City Sdn Bhd, the 22-storey building will have a gross built-up of 1.8 million sq ft and a net lettable area of 500,000 sq ft.

The relocated retailers together with new players, including those in the shoe and handbag business, are also expected to spur export business.

"The Wholesale City's history began 20 years ago at Kenanga area with small wholesale businesses. (However) the area surrounding it is not that impressive, there is traffic congestion, lack of car park space, and loading and unloading is a constant problem," Kenanga Wholesale City Sdn Bhd chief executive officer and managing director Yee Ia Howe said.

"There are about 350 wholesale operators in the Kenanga area, who are operating from shophouses. Their current transaction value is about RM2 billion, of which 30 per cent is exported and 70 per cent is for the local market.

"With the Wholesale City, we will offer more space, including for newcomers," he said.

Yee added that KWC hopes to not only double the value of the current business but to grow exports to a level that puts foreign and local demand on equal footing.

"We expect business transaction to be RM4 billion within a year of operations," he said.

This will also be made possible by KWC working together with the Malaysia Garments Wholesale Merchants Association to promote the market overseas, targeting in particular Singapore, south Thailand, Cambodia, the Philippines, Brunei and the Middle Eastern countries.

Kenanga Wholesale will be built on a 1.29ha piece of land, which used to be the site for Tenaga Nasional Bhd staff quarters.

The new building will have a gross development value of RM1 billion.

About 70 per cent of the KWC space has already been sold, with 10 per cent of the buyers being investors who have leased their property back to the developer.

Yee expects some 792 retail lots, measuring between 300 sq ft and 600 sq ft to be taken up within the next four to six months.

KWC will also continue to hold some of the floors which translates into 51 per cent control of the mall space.

"This will ensure that the developer will be able to control and manage the property and safeguard the investment of the owners," he said.

By New Straits Times (by Vasantha Ganesan)

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