700 shopping malls by end of 2019
By the end of next year, Malaysia will have close to 700 shopping malls with total net lettable area of 170 million sq ft. The biggest challenge will be to fill up the space amid the current economic backdrop, said Malaysia Retail Chain Association (MRCA) president Datuk Seri Garry Chua. Currently we have about 560 shopping malls operating nationwide with total net lettable area of about 135 million sq ft. The occupancy for majority of the malls in Klang Valley is between 85% and 87%. “One way to fill the malls, both new and existing, is tourism,” he said. In Malaysia, retail contribution to the GDP could expand to 15% from the current 10% in the next five years. Developers who are looking to set up malls should consider location and connectivity. Other important points to consider include concept, target market, mixture of tenants, security, parking, cleanliness and making the malls interactive. (NST Online)
REITs’ NPI growth not a reflection of improving sector
Last week saw a flux of quarterly earnings released by local real estate investment trusts (REITs) with most reporting a growth in their net property income (NPI), sparking optimism for a recovery in the sector that has long been plagued by concerns over oversupply and weak demand. However, analysts are saying the NPI growth was not inspired by sector-wide improvements. “The current market [situation for REITs] is more or less the same, with oversupply issues still an ongoing concern. [Most of] the growth seen in their NPI figures has largely been contributed by additional assets,” said an analyst. Another analyst noted that REITs have performed broadly within forecasts, mostly because analysts have priced in the slower rental growth trajectory. (The Edge Markets)
Tropicana divests 55% stake in Tropicana Ivory for RM70.7mil
Tropicana Corporation Bhd’s wholly-owned subsidiary Tropicana Development (Penang) Sdn Bhd (TDP) is disposing of its 55% stake in Tropicana Ivory Sdn Bhd (TISB) for RM70.7 million. TISB is a joint venture between Tropicana Corp (via TDP) and Ivory Properties Group Bhd (via Ivory Utilities Sdn Bhd) and is principally engaged in property development activities. “The proposed disposal will enable Tropicana to realize the gains from its investment in TISB, and to conserve cashflow requirement of TISB in order to focus on other project developments,” the group said. The total estimated gain from the disposal is RM10 million. (The Edge Markets)
Go for IBS by bundling private construction projects, private sector told
The Works Ministry will focus on promoting the industrialised building system (IBS) among private companies by encouraging them to bundle their projects to achieve economies of scale. According to a survey conducted by the Construction Industry Development Board (CIDB) previously, private sector adoption is still low at around 15%, while government projects are seeing higher adoption at 70%. For government projects, there is a requirement for projects that exceed RM10 million to have a minimum IBS score of 70. Construction projects from the private sector consist of 80% of the total construction value, and hence the need to encourage the sector to adopt IBS. (The Edge Markets)
Forest City aims industry-integrated city status by 2020
The developer of the Forest City project in Johor is set to realise the idea of having an industry-integrated city and mixed-use development on its four man-made islands over the next two years. Country Garden Pacificview Sdn Bhd (CGPV) said the models have been in the company’s long-term development vision for the multi billion-ringgit project, and would help boost the country’s economy. “For the next two years, we will focus on building up the industry component as part of our Industry Integration Blueprint 2020. We will continue to launch residential units depending on the demand and supply in the property market,” the company stated. To date, CGPV has invested a total of RM11.5 billion in Malaysia. The company has so far reclaimed 50% of Island One, which is utilised for retail space, the Endorra Sales Gallery, a five-star hotel and commercial units. The company said the progress of the 30 sq km mixed-use development is on track despite the project being reviewed by the government. (The Malaysian Reserve)
