This article first appeared in The Edge Malaysia Weekly on May 20, 2024 - May 26, 2024
SINGAPORE-based Allgreen Properties Ltd, a company controlled by Malaysia’s richest man Robert Kuok, has bought back the stake in Johor Bahru City Square (JBCS) mall that it sold to Singapore sovereign wealth fund’s GIC Real Estate Pte Ltd — the real estate investment arm of the Government of Singapore Investment Corp — in a deal estimated to be worth RM850 million, sources say.
It is learnt that the sum paid was for the purchase of the 70% stake held by GIC RE, which Kuok Group sold to GIC RE 20 years ago. Allgreen is understood to have completed the acquisition of the 540,000 sq ft mall about eight weeks ago. Following the purchase, Kuok Group, via two companies, will effectively hold a 76% stake in the mall.
Allgreen’s purchase marks Kuok Group’s return to JBCS as major shareholder. It was reported that in 2004, GIC RE had bought JBCS from Kuok Brothers, Pelangi Group (also controlled by Kuok Brothers), the Johor Bahru City Council and Lee Brothers. Sources say GIC RE at the time had paid close to RM500 million for the stake.
It is noteworthy that the purchase comes when there is a lot of excitement surrounding The Johor Bahru-Singapore Rapid Transit System (RTS). Incidentally, a station will be located just 500m from this mall. The RTS is expected to be operational by Jan 1, 2027.
Sources say property developer and mall owner/operator Allgreen’s entry into Malaysia also marks the beginning of the company’s plan for future investments in Malaysia’s retail industry.
At the time of writing, Allgreen had not responded to questions sent by The Edge about the acquisition.
Allgreen’s website already lists JBCS as one of its retail assets. The company describes the property as being located minutes away from the customs and immigration checkpoint (JB Sentral/CIQ), and that it is a six-storey mall that offers over 1,250 parking bays.
The mall also hosts more than 200 retailers, including mmCineplexes, H&M, Decathlon, Uniqlo, Popular, Queen Karaoke and Mr DIY.
According to a source, the mall enjoys a strong occupancy of over 85%. Except during the Covid-19 pandemic, the mall has consistently performed well, the source says. At least two separate sources tell The Edge that Allgreen may look at investing in other malls in the future.
“For a start, the new owners are expected to undertake some asset enhancement initiatives (AEI) on JBCS,” a source says.
“Allgreen will be carrying out AEI works soon to refurbish/revamp the mall and car parks for an exciting fresh/new look and feel,” another source says, adding that the mall is now 25 years old.
The mall is owned by Johdaya Karya Sdn Bhd. A search on Johdaya Karya on the Companies Commission of Malaysia website shows that it is 70%-owned by Aldertree Properties Sdn Bhd, a company incorporated on Jan 23, 2024, and 30% by Merit Properties Sdn Bhd. Aldertree is 75%-owned by Allgreen Properties (Malaysia) Pte Ltd (75%) and Kuok Brothers Sdn Bhd (25%).
The directors of Johdaya are Ng Mui Kit, Tan Siew Min, Yap Mei Leng and Tho Leong Chye. Datuk Mohd Noorazman Osman, the mayor of Johor Bahru, also sits on the board. Majlis Bandaraya Johor Bahru owns 15% of the mall. The stake is held via Merit Properties, in which MBJB has a 50% stake.
The remaining shareholders of Merit Properties are listed as I&P Multi Resources Sdn Bhd (20%), Kuok Brothers Sdn Bhd (20%) and Lee Rubber (Selangor) Sdn Bhd (10%).
Based on the latest available financials, in the financial year ended March 31, 2023, Johdaya posted revenue of RM39.46 million and a net profit of RM43.33 million. As at the same date, the company had total liabilities of RM120.13 million and total assets of RM1.03 billion. It also had accumulated profits of RM747.08 million.
“The mall’s footfall has increased dramatically since Covid-19 and is expected to improve with so many growth drivers in Johor Bahru. The entry of key tenants draws in new crowds. A relook of the mall is necessary to cater for this new landscape,” Samuel Tan, executive director of KGV International Property Consultants, tells The Edge.
“The purchase of JB City Square mall by Kuok Brothers was indeed a surprising move but it goes to show that the JB city centre is poised for prominence as a cross-border retail destination in view of its proximity to the CIQ and linkage to the RTS, which will provide high-speed travel between JB and Singapore,” says ExaStrata Solutions Sdn Bhd CEO and chief real estate consultant Adzman Shah Mohd Ariffin.
Allgreen, which has been in property development since the 1980s, started as a division of Kuok (Singapore) Ltd. It was listed on the Singapore Exchange in May 1999 but delisted in August 2011, following a compulsory acquisition by Brookvale Investments Pte Ltd, which is also part of the Kuok Group of companies.
Allgreen’s retail investment assets in Singapore include lifestyle mall Great World and Tanglin Mall. It is also scheduled to open Pasir Ris Mall this quarter.
In March, it was reported that Allgreen had bought suburban shopping complex Seletar Mall for US$412 million from Cuscaden Peak, which is jointly owned by tycoon Ong Beng Seng’s Hotel Properties and companies linked to state-owned Temasek Holdings.
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