Monday 27 May 2024
main news image

KUALA LUMPUR: Sunway Bhd, controlled by property tycoon Tan Sri Jeffrey Cheah, is diversifying its business to include developing and operating premium outlets, the first of which is to be opened in Ipoh, Perak.

“Sunway Ipoh Premium Outlet will be our first venture into the outlet shopping concept. We are now in the advanced stages of finalising our plans,” Sunway chief executive officer of shopping malls and theme parks, HC Chan, told The Edge Financial Daily in an interview.

Spanning over 35 acres (14.16ha) of land, the premium outlets will be situated close to the Lost World of Tambun water theme park. They will feature popular luxury brands such as Coach, Michael Kors and Kate Spade. Construction will take two years to be completed.  

Chan, adviser and immediate past president of the Malaysia Association for Shopping and High Rise Complex Management, said Sunway Ipoh Premium Outlet will be a fully-integrated development modelled after the Sunway Resort City in Bandar Sunway, Petaling Jaya.

“It’s [going to be] like the Sunway Resort City. Apart from the premium outlets, we will also have a hotel, theme park and shopping mall there,” he said, adding that the group is already operating a hotel and theme park in Ipoh, which are the Lost World Hotel and the Lost World of Tambun.

Chan said the design and planning works for the development had been finalised and discussed with the relevant retailers.

“The feedback on our premium outlet plan has been positive,” he said, adding that the development will be able to leverage on the traffic flow from the North-South Expressway.

A concept that originates from the US, Chan said premium outlets are usually located some distance away from city centres as customers are willing to travel for a good buy. It also minimises competition in the shopping malls located in the city centres.

A typical premium outlet centre has a single- or double-storey layout consisting of branded goods sold at discounted prices.

“There is an emerging trend among young people who like to own a Coach, Michael Kors or Kate Spade at a price that they can afford,” Chan said, adding that he sees a growing shift towards lifestyle shopping.

He said the refurbishment of Sunway Putra — comprising Sunway Putra Mall, Sunway Putra Hotel and Sunway Putra Tower — and the redevelopment of Sunway Velocity (formerly Queensbay) in Kuala Lumpur is on track for completion by the end of this year and end-2015 respectively.

The total investment in Sunway Putra is about RM600 million, while close to RM1 billion has been invested in Sunway Velocity. When completed, Sunway Putra Mall and Sunway Velocity will have a net lettable area of 600,000 sq ft and 900,000 sq ft respectively.

Chan expects the two projects to contribute substantially to Sunway’s bottom line.

“We believe that these two projects will give us strong, healthy returns … I don’t want to put a figure [on it], but we are very confident and comfortable that the financial returns will be very healthy,” he said.

Sunway Velocity is located in a high disposable income area in Cheras and there is a lack of well-planned shopping malls to serve southern Kuala Lumpur, said Chan.

“As for Sunway Putra Mall, it was a popular shopping mall 25 years ago [when it was known as The Mall]. We want to bring back the glory days,” he said, adding that the mall is strategically located in the vicinity of the upscale Bukit Tunku area, with highway accessibility.

For the financial year ended Dec 31, 2013 (FY13), Sunway’s core net profit rose 38% to RM482.7 million from RM350.7 million, while revenue was 15% higher at RM4.73 billion compared with RM4.13 billion in FY12.

Chan believes that there is a need to occupy a leadership position in this lucrative, but increasingly competitive shopping mall industry to survive.

“[For example,] there may be 20 shopping centres [around], but customers are unlikely to visit all 20 shopping centres as they have limited budget and time. [Therefore] we have to position ourselves as the preferred shopping mall for the primary market that we are in,” he said.

Sunway currently owns five shopping malls. They are Sunway Pyramid, Sunway Giza in Kota Damansara, Sunway Putra, Sunway Velocity and Sunway Carnival in Seberang Perai, Penang.

There are also plans to open a shopping mall in Iskandar Malaysia, Johor.

Chan said the proposed mall will be located in the group’s development in Iskandar Malaysia called Sunway Iskandar, adding that there are no details yet as it is still at the planning stage.  

“We can confidently say that in the coming years, Sunway will be one of the biggest mall owners and operators in the country,” he added.

This article first appeared in The Edge Financial Daily, on April 14, 2014.

      Text Size