This article first appeared in The Edge Financial Daily on June 21, 2017
KUALA LUMPUR: The developer of the RM8.7 billion Bukit Bintang City Centre (BBCC), undertaken on the former Pudu Prison site, is unfazed by the prospect of persistent oversupply of properties, including retail spaces.
“We obviously recognise the [oversupply] of various types of premises in the Malaysian market, but we are confident of developing the BBCC into a spectacular one in terms of competitive advantage,” said BBCC Development Sdn Bhd chief executive officer Datuk Richard Ong.
“We count on our competitive edge to take us through the supply and demand issue. Supply will always be there [and] demand will always be affected, but [more importantly] are the quality and speed of completing a particular project,” Ong told reporters after the project’s ground-breaking ceremony yesterday, officiated by Prime Minister Datuk Seri Najib Razak.
BBCC Development is a consortium comprising the Employees Provident Fund (EPF), UDA Holdings Bhd and Eco World Development Group Bhd (EcoWorld).
The mixed development includes the RM1.6 billion Mitsui Shopping Park LaLaport Kuala Lumpur (LaLaport KL) retail mall, which will be owned and operated by MFBBCC Retail Mall Sdn Bhd, a joint-venture company established in October 2016 by BBCC Development and Japan-based Mitsui Fudosan (Asia) Pte Ltd.
BBCC Development said the BBCC’s phase 1, comprising LaLaport KL, an entertainment hub, a four-star hotel, a strata office and two blocks of serviced apartments, is scheduled to complete by December 2020.
Ong said the development of LaLaport KL will leverage on Mitsui Fudosan’s expertise and experience in real estate development and its retail projects overseas.
Additionally, BBCC Development, which witnessed positive market response for the first block of serviced apartments comprising 393 units with 70% of the units sold, will launch the second block by the third quarter of 2017.
With about 270 units, the new block has a gross development value of nearly RM300 million, Ong said.
Mitsui Fudosan is not the only foreign investor involved in the BBCC. In early February, BBCC Development inked a lease agreement with Japan’s Zepp Hall Network Inc, a subsidiary of Sony Music Entertainment (Japan) Inc, for the latter to operate a Zepp-branded concert hall in the BBCC.
On whether the company is looking to rope in more foreign partners for the BBCC’s other components, such as office and residential units, Ong said potential foreign investors will be selected mainly for the purpose of joint cooperation with BBCC Development.
“At the moment, [MFBBCC] is investing RM1.6 billion in developing LaLaport KL. As for other investments, we haven’t really set targets as we see the BBCC as being largely a Malaysian-led development.
“So, we reserve certain components to be developed by the consortium, meaning future developments in [the] BBCC will be jointly undertaken together with [the] EPF and UDA. This is not the case of selling everything to foreign investors, but more like a joint collaboration to showcase the best of what Malaysians can do.”
Still, Ong noted that BBCC Development is seeing continued interest from parties in Japan, Singapore and Spain, which according to him have their eyes on the hotel component of the BBCC.
“There is also interest from Australia and the UK, partly because our associate, Eco World International Bhd, has [a] presence in Sydney, Melbourne and London,” he said.
In his speech, Najib describes the BBCC as a “significant national-level development” due to its ability to attract foreign investments.
“I am happy to note the BBCC project, together with the impressive Mitsui Mall (LaLaport KL), is yet another model of how our Economic Transformation Programme is bearing fruit in terms of attracting foreign investments, as we help Malaysian companies grow and expand at the same time,” he said.