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Monday, October 13, 2008

Cybercentre status to boost Mid Valley office revenue

HIGHER OFFICE REVENUE: Barragry says the response after the MSC status launch is encouraging, given that 300,000 sq ft office space has been dedicated for MSC-status companies.

Office turnover at Mid Valley City in Kuala Lumpur will grow some 80 per cent to RM90 million by next year as The Gardens North and South Office Towers are fully leased out and occupied.

While office revenue for 2008 is expected to be between RM50 million and RM55 million, the incremental growth will be fuelled by Mid Valley City receiving its MSC Malaysia Cybercentre status last month.

Mid Valley City Gardens Sdn Bhd chief executive officer Antony Barragry said the response after the MSC status launch was encouraging, given 300,000 sq ft of office space had been dedicated for MSC-status companies.

"We will use much of the balance of the Gardens North Office Tower for our commitment to the MSC (status). We are in active negotiations with quite a few parties, and are confident that we should lease out in the next six months," he said.

Current occupancy rate at the Gardens South Office Tower is 76 per cent, while 86 per cent has been leased out. Meanwhile, the Gardens North Office Tower has an occupancy rate of 15 per cent and 25 per cent leased out.

The towers also target high-end corporate businesses albeit in the financial, marketing and oil and gas segments, as there has been pent up demand for Class A office space in the area.

Rental for office space will average RM6 to RM7 per sq ft as it will provide the company a sustainable business over the long term.

Barragry said the Mid Valley City development has a strong retail mix from its two malls, combined with three hotels and large office space.

"It gives us a dynamic mix and a sustainable model. For us as a group, most of this is recurring income so it allows us not only to operate but keep abreast with the latest technology," he said.

Mid Valley City is expected to contribute some 41 per cent to its holding company IGB Corp Bhd group projected revenue of RM1.15 billion for financial year ending December 31 2008.

The total revenue of RM470 million estimated to come from Mid Valley City development encompasses the office revenue, some RM280 million from retail and RM90 million from the hotels.

The RM470 million represents between 80 to 90 per cent of its full potential turnover upon completion of the development.

As the Gardens Hotel and Office Towers become fully operational and leased out next year, overall revenue contribution by sector in Mid Valley City will be 55-60 per cent retail (including car parks), 20 per cent offices and 20 per cent hotels.

The Mid Valley City development still has some 0.81 ha of land left to develop. Originally, the land was to be used for the construction of a convention centre but now it will see high-end condominiums.

"We recognise that Mid Valley City is a business hub so we are looking at whether we can bring some commercial element into this development. We have enough space to put two towers," Barragry said.

He said the company was currently negotiating with City Hall to wrap up the deal and should be able to firm up their plans by the coming Chinese New Year.

Barragry added that the company will study the Klang Valley market for the next five to 10 years and decide if this development was suitable before proceeding.

By New Straits Times (by Jeeva Arulampalam)

RM100mil Mesra Mall opens its doors in Kertih

MESRA Mall, a RM100mil ultra-modern shopping complex, has opened its doors to shoppers in the Kerteh petroleum town.

Built on a 12ha site, it promises to be a new landmark for shoppers and tourists coming to Terengganu.

With Suria KLCC Sdn Bhd managing the operations, the complex is developed by KLCC (Holdings) Sdn Bhd through its two subsidiaries — Metro Kemasik Sdn Bhd and KLCC Projek Sdn Bhd.

Kumpulan KLCC (Holdings) Sdn Bhd chief executive officer Hashim Wahir said with the opening of the complex, people around Kemasik, Paka, Kerteh, Kijal and Chukai would no longer need to go to Kuantan or Kuala Terengganu to buy basic needs.

“Mesra Mall is among our efforts to provide the opportunity for the people here to enjoy facilities similar to that available in big towns.

“Moreover, with higher fuel prices, the people need not go far to buy their essentials and branded items as these goods are available at the mall,” he added.

Hashim said this after the complex opening by state executive councillor for rural development, entrepreneurs and cooperatives, Datuk Mohamed Awang Tera, who represented Terengganu Menteri Besar Datuk Ahmad Said.

Hashim hopes the complex would serve as a catalyst for commercial development in the Kemaman district and in Terengganu, adding that it had provided jobs for about 500 locals.

Earlier, Mohamed Awang, in his speech, said Mesra Mall would provide business opportunities for the locals to boost their income.

“The shopping centre will not harm businesses of the small and medium-scale entrepreneurs as they have been provided with separate trading areas to sell their goods,” he added.

By Bernama