Property developer Mah Sing Group Bhd is confident that the recently completed Southgate project in Sungei Besi here will be a success and the group plans to replicate the model elsewhere.
Mah Sing Properties Sdn Bhd chief operating officer Andy Chua feels that there are at least two other locations where the Southgate model can be duplicated - in Johor and Penang.
Chua, however, said they must be in the right location.
Southgate, a development project on 1.93ha with RM466 million gross development value, comprises office-cum-retail building. All units have been sold.
The project, comprises two main blocks - Apex and the Corporate Building - and three other blocks named Vox, Vivo and Vertex. Together, they offer 600,000 sq ft of net lettable area.
The eight-storey main block has three storeys of retail space and is owned by Kooperasi Permodalan Felda Bhd.
Felda bought this block for RM226 million and has leased it back to Mah Sing's unit. For the first two years, Felda will receive a guaranteed 8 per cent monthly rental based on the purchase price. Thus far, 60 per cent of the main block has been leased.
Total retail leasable area is 200,000 sq ft in Southgate, of which 40 per cent is yet to be rented out.
Chua expects the retail portion to be 90 per cent tenanted within a year's time. The average rental for the retail portion on the ground floor is RM10 per sq ft, including service charge.
"This is not a conventional mall. It is more like street mall, where it is about al fresco dining where one can have a stroll. It is a covered area, but sunlight can come in," he told Business Times in an interview.
The tenants are predominantly from food and beverage business, he added. Its retail tenants include Nichi Fashion, Georgeous, OverTime, Papa King and Sushi King.
Southgate's target market during the day will see the the office tenants complementing the retail component. At the same time, Chua expects people driving by the area to stop for breakfast and lunch at Southgate.
He said for dinner, Southgate will attract those heading home from Kuala Lumpur and will use the place as a meeting point. "This is the southern gateway out of KL," he added. – Business Times