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Tuesday, January 20, 2009

1Utama owner wants to run own mall

See Hoy Chan Holdings is unlikely to renew a lease that lets Aeon Co (M) Bhd manage the first phase of the 1Utama shopping complex in Bandar Utama, Petaling Jaya.

The 15-year lease between Aeon and See Hoy Chan, which owns the shopping complex, will end sometime next year.

Aeon, operator of the Jusco department stores, manages the first phase, which opened in 1995, handling two million sq ft of gross space and 680,000 sq ft rentable area.

The second phase, with three million sq ft of gross space and 1.2 million net rentable area, is owned and operated by the developer See Hoy Chan. It opened in December 2003.

"We are negotiating a new arrangement with Jusco," See Hoy Chan director Datuk Teo Chiang Kok told Business Times.

"We prefer to run it on our own to present the mall as an integrated and wholesome centre," Teo said.

Nevertheless, See Hoy Chan would like Aeon to continue being its anchor tenant.

Apart from the department store and supermarket, Jusco also operates the Jusco Home Centre and Jeans Studio in 1Utama.

Aeon derives its revenue both from retail sales and mall management.

According to Aeon's website, there are 21 Jusco stores in the country, of which 16 are located in shopping complexes which it also manages.

In the first nine months ended September 30 2008, Aeon posted RM75.77 million profit on RM2.5 billion revenue.

Profits from retail operations (before tax) accounted for RM70.66 million and from property management, RM46.49 million.

By Business Times (by Vasantha Ganesan)

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