Thai CPN sees modest returns

By THE STAR
SHAH ALAM: I-Bhd’s joint venture (JV) with Thai mall specialist CPN Global Co Ltd is expecting the Central Plaza i-City shopping mall project to break even within seven years of its opening in 2017.
CPN, which is leading the JV and owns a 60% stake in the venture, is estimating an internal rate of return of 13% for the mall investment into i-City. The JV will directly own and operate the shopping mall.
“Given that this is our first venture in Malaysia, we are more conservative and expecting a lower return now. Hopefully, when we are established a little bit longer, we will be able to find a way to improve it (the rate of return),” CPN chief development officer Wallaya Chirathivat (pic) told StarBiz yesterday.
“This mall will target the middle to upper middle-income category of shoppers,” she added.
The mall, which will have a total net lettable area of 860,000 sq ft, is expected to house 450 retail outlets.
“We are still researching and gathering information on what sort of commercial mix we should put up. But as an estimate we are now allocating fashion 25%, food and beverage 30% and services will make up the rest. But this can change with changing lifestyle factors,” Wallaya said.
She said that the JV was now in talks with suitable anchor tenants for the mall and would finalise one by year-end.
The Central Plaza i-City mall is a six-storey retail mall with three levels of basement parking offering vehicle carpark space of more than 3,300 vehicles with 12.12 acres of land under ownership.
Construction of the RM580mil mall is expected to begin in the beginning of next year. The JV is currently in the design and application for a construction permit stage.
The JV company had in March 2014 got its approval from the state for the sub-division of the site to provide the mall with a separate land title.
This would suit its plans for an eventual unlocking of the mall value via a real estate investment trust as there were requirements for the mall to be built on a separate plot of land as well as being a dedicated mall building.
Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim said in his opening speech at the unveiling of the amended design of the mall yesterday that the state government hoped that the mall would eventually transform Shah Alam into a regional shopping centre.
Deputy chairman of I-Bhd Datuk Eu Hong Chew said that the JV had over the past year spent a considerable amount of time and effort to meet all the land conditions and redesign the project to allow for the mall and Central Tower development to share the same design theme.
Wallaya added at a separate press conference that the cooperation with I-Bhd might pave the way for similar cooperation to open more similar malls in the future.