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Saturday, February 19, 2011

MRCB plans RM300m condo project in KL

PROPERTY developer Malaysian Resources Corp Bhd (MRCB) aims to launch a high-end condominium project in Kuala Lumpur, worth an estimated RM300 million, by the end of this year.

The company has bought 0.4 hectare along Jalan Kia Peng, near the Petronas Twin Towers, from a land owner for an undisclosed amount.

MRCB chief executive officer Datuk Mohamed Razeek Hussain said on Wednesday in a statement that although it is leasehold land, it would be ideal for a residential development due to its prime location and scarcity of land within the Kuala Lumpur City Centre vicinity.

Mohamed Razeek said the company is now finalising the building design and layout plan.
The project, slated to be done in three years, will set a new benchmark in luxury development at the Jalan Kia Peng area along side other established residences, he added.

MRCB also plans to inject new ideas to ensure the project's success.

"With the injection of our concept, the residential development is expected to become yet another preferred residential address with an excellent choice of designs," Mohamed Razeek said.

MRCB, through its property arm MRCB Land, has more than RM5 billion worth of on-going property projects.

By Business Times

Bangsar Shopping Centre constantly reinvents itself to keep up with competition

Upgrades to the BSC in Bangsar are over as there’s no more space left.

BANGSAR Shopping Centre (BSC), which was developed some 20 years ago by Bandar Raya Developments Bhd (BRDB), is still a successful and thriving mall today.

This is despite having to face competition from malls such as Mid Valley Megamall, Bangsar Village I & II and Tropicana City Mall, which are all located within a radius of less than 5km.

John Sironic likens BSC’s lasting power to how Madonna has remained relevant after all these years.

BRDB group retail operations head John Sironic likens BSC's lasting power to how the Queen of Pop, Madonna, has remained relevant after all these years.

“The key is never to stay still, like the Madonna Principle. The reason she has been able to be around for so long (in the music scene) is because she's constantly reinventing herself,” he tells StarBizWeek.

“That's how we have been around for so long. We can't rest on our laurels. We need to keep reinventing ourselves and be up-to-date with the latest trends,” Sironic adds.

According to Sironic, BSC started off about two decades ago with just a single (East) wing.

“About 10 or 12 years ago, we added a new (West) wing,” he says.

In February 2008, BRDB invested RM250mil to upgrade BSC as it felt that the time was right to “reinvent.”

“The mall had been around for so long and it was starting to look a little old. So, we redressed the mall both internally and externally,” Sironic says.

Upgrades, which included a new annex and a 12-storey office block at the back of the mall, took over a year to complete.

“We completed the construction in July of 2009. The job could have been done a lot faster but to do that, we would have needed to close down the mall.

“But we did not do that because we did not want to cause inconvenience to our shoppers,” Sironic says.

The refurbishment of BSC saw the mall increase its floor space to 325 sq ft from 262 sq ft previously. The number of shops also increased to 170 from 126 before.

Sironic also says the addition of new stores was timely as people had become more affluent over the years and had better spending power.

“We felt that it was time to make the mall more contemporary and current. We also felt that we owed it to our tenants, some of which also upgraded to larger lots.”

Sironic says that during the upgrading process, BRDB also took the opportunity to “reshuffle” its tenant mix a little for the better.

“We did some retail zoning and decided to cluster certain tenants in certain areas. So now, you have tenants that specialise in information technology in one area, services for women on one side and home furnishing or jewellery in certain locations.”

The need for reinvention is necessary, especially as needs to compete with malls such as Bangsar Village I & II, which are arguably its closest competitors.

Bangsar Village I “opened its doors” in 2004. Sironic admits that BSC did experience a slight drop in shoppers when the new mall started.

“Initially, there was an impact as shoppers were curious to see what they had to offer. However, people are creatures of habit and after a while they go back to the mall that they had been shopping at for so long.”

Sironic argues that BSC is different from its nearest competitors.

“BSC has a large F&B (food & beverage) offering. The layout of our mall is also different. We have an open front and it is not shaped like a box.

“Even our entrance has no doors and this provides an inviting, resort-like feel.”

Despite conducting the renovations in the thick of the global financial crisis, Sironic says BSC did not see any real drop in shoppers.

“We think this was because we (BSC) have been here for quite a while and our customer base is quite loyal.”

BSC's shoppers generally comprise a more affluent crowd especially expatriates.

“We get a lot of expatriates because they live within the (Bangsar) area. Our mall has sort of become like their backyard. A lot of them come here in simple clothes, wearing a pair of shorts and slippers. We're not a shopping centre that requires you to dress up.”

Sironic says BSC has always positioned itself as a lifestyle, boutique mall that has niche tenants offering niche products.

“We are not intentionally expensive (in terms of product offering). We have small boutique retailers that don't necessarily attract a mass crowd.

“However, I think it is a misconception that we only attract expatriates or only high-end shoppers. You get a large local crowd as well and despite our niche tenant mix, we cater to all income segments.”

Despite having niche tenants within its premises, Sironic says BRDB is open to any kind of tenant that is interested in setting up shop at BSC.

“We don't want cannibalisation, in that we don't want to have tenants that offer the same kind of products. However, we're open to all tenants. We never say never. But for now, our retail mix is complete.”

Pulling in the crowd

One of BSC's key anchor tenants is Cold Storage supermarket, which is a popular attraction for shoppers.

Sironic says it is a misconception that prices of goods and products at BSC's Cold Storage outlet are overpriced.

“From the discussions that we have with them, we understand that they regularly conduct price checks with other competitors to remain competitive.”

Other than Cold Storage, Sironic says other tenants are equally important in terms of “pulling in the crowd.” “They also act as anchors in their own way.”

Many successful malls today have a cineplex as part of their tenant mix. Some time back, BSC had a couple of cinemas but no longer. Sironic says there are no plans to have a movie theatre at BSC.

“For cinemas to be successful, you need a huge area to accommodate multiple cinemas. Because we're not a large mall, we do not want to cater too much space only for movie theatres.”

According to Sironic, the average rental rate at BSC ranges from as low as RM3 per sq ft to RM50 per sq ft.

“It's a wide range and depends on location and usage,” says Sironic. According to him, about 32% of the mall's floor space comprises F&B tenants, which is unusually high for a typical mall.

“We have a wide range of F&B tenants, which include American fast food, coffee shops, fine dining, lifestyle and outlets that cater to a much younger crowd. We want to have a mall where anyone can come and just enjoy themselves.”

BRDB is also planning to open up a 10,000 sq-ft food court in BSC by mid-year.

It also plans to offer free shuttle services from the Bangsar LRT to the mall by next month.

“Once the food court opens and together with the new shuttle service, we expect to attract more customers into the mall, Sironic says.

Sironic says BSC organises three types of promotional events to attract shoppers. First, it hosts activities that are done by external parties.

Case in point is local Peugeot distributor Nasim Sdn Bhd which launched its 308 cc Cabriolet convertible at BSC last month.

“Other promotional activities are done by our tenants themselves and then, there are also calendar-based or festive events.”

Sironic says Christmas is often its peak period in terms of sales, followed by the Chinese New Year festive season.

“Christmas is also a big period because it's the year-end and a time when people get their bonuses,” he says.

BRDB's Grade-A office block, BRDB Tower, meanwhile, currently has a 50% take-up rate. Sironic says BRDB intends to fully lease the 12-storey block by the third quarter of this year.

“Our tenants include banks RHB and Al-Rajhi. There's also a gym and a neurological specialist coming, he says, adding that BRDB is offering “Grade-A” office rates to its tenants.

Sironic says BRDB targets tenants that can also take advantage of the mall's services and facilities.

For now, upgrades to BSC are over, he says. “There's just no more space. We've expanded as much as we can.”

However, setting up a new BSC in another location is definitely a possibility, he adds.

“A new BSC is possible. We're always looking for opportunities. It (setting up a new mall) could be done either independently or via a joint venture.”

By The Star

Asian property market surges 59pc in 2010

HONG KONG: A massive US$63 billion (US41 = RM3.04) was spent on property transactions in Asia last year, a 59 per cent rise from 2009, as the region's economies led the recovery from the global financial crisis, a report said.

Surging prices in Hong Kong and Tokyo made up almost half the total amount spent, according to the study, which comes as several Asian countries grow concerned that large inflows of foreign cash are causing asset bubbles.

The figures, from real estate consultancy CB Richard Ellis, are a huge increase from the US$39.2 billion spent in 2009, when the globe's worst economic crisis since the Great Depression sent property prices sliding.

"The Asian real estate investment market enjoyed an encouraging end to the year and prices for prime investment property have now recovered substantially," said Nick Axford, the consultancy's head of research for the Asia-Pacific area.

"The market outlook remains generally optimistic," he added.

Hong Kong accounted for US$15.2 billion of the total, while Japan's market saw US$14.2 billion in transactions.

Prices in Hong Kong have jumped 50 per cent in the past two years due to low interest rates, a strong economy and an influx of mainland buyers who make up a big proportion of purchases, especially of luxury homes.

Worries about a property bubble have prompted Hong Kong's government to announce a series of measures to cool the market, including boosting land supply and new stamp duties to keep out so-called hot money.

Asian economies have outperformed their Western counterparts in recovering from the global economic slump that started in late 2008, with cash-rich foreign investors and low interest rates stoking demand for Asian properties.


Proposals to reduce number of abandoned housing projects

The special task force to facilitate business (Pemudah) is suggesting ways to further reduce the number of abandoned housing projects in Malaysia.

As at June 30 2010, there were 423 housing projects that were being monitored by the Ministry of Housing and Local Government (MHLG). The projects are either delayed, ailing or abandoned.

In taking those responsible to task, MHLG has implemented stiffer actions by compounding and prosecuting errant developers and blacklisting some.

Under its 2010 annual report, Pemudah is proposing new ideas, which include raising the deposit required to get a developer's licence from the current RM200,000 by 5 per cent.

It also wants to make it mandatory for developers to take on the build-then-sell concept (BTS) and introduce the housing insurance scheme as suggested by the Real Estate and Housing Developers' Association of Malaysia (Rehda), to provide a boost to buyers.

"The government has intentions to review the deposit. One of the proposal is to increase 5 per cent of the construction cost.

"This will ensure only good developers enter the market," said Datuk Abu Bakar Hassan, deputy director-general (development) of the National Housing Department under MHLG.

On the BTS scheme, Abu Bakar told Business Times that the government is studying if it should be made mandatory.

Under this scheme, a buyer would pay 10 per cent down payment for a property, and the rest, after the project is completed.

But developers are complaining as they would have to build the properties with no assurance that buyers would stay, he said.

Abu Bakar said projects are often abandoned as a result of mismanagement, financing issues, mismatched development components and fraud by developers.

"Rehda is proposing that insurance companies take on the risk to protect buyers, if a project is abandoned. The issue is whether they are willing to do it," Abu Bakar said.

By Business Times