Pramerica Real Estate Investors (Asia) Pte Ltd intends to invest some RM1.1 billion in four retail projects comprising shopping malls around Malaysia through its Asian Retail Mall Fund (ARMF).
Pramerica is a real estate investment business of US-based Prudential Financial Inc. According to its director of portfolio management Bernard Loh, it is still awaiting evaluation of the malls’ gross development value (GDV).
ARMF is a real estate fund managed on behalf of institutional investors by Pramerica. It also owns Kinta City in Ipoh but is not involved in the mall’s management.
Three of the four shopping malls are under construction: SSTwo in Petaling Jaya, Ampang Mall and 1st Avenue in Georgetown. Meanwhile, the RM40 million refurbishment of Penang’s Island Plaza will commence in the first quarter of next year for 15 months. The mall was acquired in August last year for RM120 million.
The four malls provide a total net lettable retail area of approximately 1.8 million sqf.
The opening of SSTwo is targeted for end 2009. The construction of 1st Avenue and phase one of Ampang Mall would be completed by the fourth quarter of next year and the first quarter of 2011 respectively.
ARMF’s investments in Singapore include seven shopping malls: Tiong Bahru Plaza, Century Square, Hougang Mall, White Sands, Liang Court, Jurong Point 2 and Tampines 1, as well the Central Plaza office tower.
Its eighth mall, Serangoon Mall, is slated for completion in the first quarter of 2011. Loh said ARMF may acquire more malls in Malaysia, but in developed areas of Klang Valley and Penang.
“The decision to invest in Malaysia was driven by the positive growth figures and consumer sentiment despite difficult global market conditions. The latest Malaysia Retail Industry Report placed the total retail expenditure of 2007 as nearly RM67.1 billion, 12.8 per cent higher than the year before.
“We also believe that other critical factors like increasing tourist arrivals and sustained domestic spending will provide higher revenues,” he added.
Demand for suburban malls is increasing despite the global financial crisis, as not many major malls opened in 2007, said Adzman Shah, senior director of DTZ Nawawi Tie Leung Property Consultants Sdn Bhd. The firm will be the leasing agent and retail mall manager of the four Malaysian malls.
“For well-located malls, the average occupancy is between 80 per cent and 90 per cent. We talked to some retailers and they are quite excited about the projects. They know the market will be going very fast once it moves on,” Adzman added.
