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Wednesday, April 22, 2009

EcoFirst rebrands education mall

PETALING JAYA: EcoFirst Consolidated Bhd aims to achieve a yield of up to 7.5% annually for its South City Plaza in seven years after the rebranding of its key property asset into an educational mall due for launch on Friday.

Tiong Kwing Hee (inset) says South City Plaza will be rebranded as Edu Mall @ South City.

Executive director Tiong Kwing Hee said the rebranding of the Edu Mall @ South City was part of the group’s restructuring exercise to give a good return for its long-term investment in the property.

“We aim to sell the property to real estate investment trusts once we achieve our targeted yield within seven years,” he told StarBiz.

Currently, about 4,000 students are receiving higher education and vocational training offered by eight institutions at the five-storey mall in Seri Kembangan, Selangor.

Among them are EcoFirst’s 27%-owned associate SEG International Bhd (SEGi), International College of Health Sciences and Summit Multimedia Education Sdn Bhd.

The group targets to increase the number of students at the mall to 6,000 by year-end and 10,000 by end of next year.

“We have allocated about 25% of the total lettable area of the mall, or 200,000 sq ft, for these educational providers, which received competitive rental rates of RM1.50 per sq ft from us,” said Tiong.

“We still have about 70,000 sq ft reserved for educational tenants.”

To enhance the value of its property, EcoFirst plans to build two blocks of 13 to 14-storey apartments which can house about 3,000 students on top of the mall to be leased to SEGi.

With a gross development value of RM75mil to RM80mil, the serviced apartments were expected to be completed within 24 months after construction starts in the fourth quarter.

“We plan to take about RM50mil in bank loans to fund the project, which would cover about 73% of the costs,” said Tiong.

“We are confident that the serviced apartments would give 6.5% to 7% returns to SEGi yearly.”

EcoFirst had last year invested about RM5mil to give the mall a facelift.

By The Star (by Shannen Wong)

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