Perda City Mall in Bukit Mertajam up for sale

This article first appeared in The Edge Malaysia Weekly, on April 2, 2018 - April 08, 2018.

Perda City Mall had grabbed the headlines in August 2016 when the owners abruptly put up the shutters after giving the tenants only a day’s notice.

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PERDA City Mall in Bukit Mertajam, Penang, has been put up for sale and according to real estate players, it may fetch as much as RM500 million.

The 10-year-old shopping centre, which went into receivership in July 2017, was previously known as AEON Seberang Prai City Shopping Centre. The four-storey building — with a gross floor area (GFA) of 2.36 million sq ft, a net lettable area (NLA) of 1.15 million sq ft and a single level of basement parking — is located on 19.66 acres or 856,358 sq ft of freehold land in Bandar Perda.

In an advertisement last month, KPMG Deal Advisory Sdn Bhd invited bids for the now defunct mall on a “as is where is” basis. However, none of the three individuals listed as the contact persons in the ad responded to questions sent by The Edge.

Perda City Mall had grabbed the headlines in August 2016 when the owners abruptly put up the shutters after giving the tenants only a day’s notice.

The Edge understands that the mall belongs to Northern Mall Sdn Bhd (previously known as D’Aseania Mall Sdn Bhd). A search on the Companies Commission of Malaysia’s (SSM) website shows that Chan Siew Mei and Mohamed Raslan Abdul Rahman were appointed as the receivers and managers for Northern Mall on July 5, 2017. Chan and Mohamed Raslan are attached to KPMG Deal Advisory.

It is not known who appointed the receivers but the company’s list of unsettled charges points to Maybank Islamic Bhd.

Industry sources say Perda City Mall could be sold for between RM300 million and RM500 million and that the surrounding retail space would be a big determinant of interest.

Apart from AEON Bukit Mertajam, which is located 20 minutes away from Perda City Mall, there are several other existing and upcoming shopping centres in the vicinity.

Sunway Carnival Mall (at a 20-minute drive from Perda City Mall) has an NLA of 500,000 sq ft and GFA of 780,000 sq ft, but it plans to expand its NLA to 830,000 sq ft and GFA to 1.45 million sq ft. The expanded mall is scheduled to open in the fourth quarter of 2020.

Another nearby upcoming development is GEM Megamall. To be built on 11.32 acres in Jalan Baru, it is expected to be the largest mall in the northern region upon its completion in 2021, offering an NLA of 1.2 million sq ft.

Yet another retailer located just 3.8km from Perda City Mall is Mydin HyperMall Bukit Mertajam, which is Mydin’s largest hypermarket in the country with a built-up of one million sq ft and NLA of 536,507 sq ft.

Other players are Design Village Outlet Mall, located 30 minutes away, and the upcoming Sentral Penang in Seberang Perai.

The closing date for the Perda City Mall tender is April 16, but the receivers and managers are not bound to accept the highest offer or any offer for that matter.

Latest financial filings with SSM reveal that Northern Mall posted a net loss of RM14.24 million on revenue of RM20.74 million in its financial year ended Oct 31, 2014 (FY2014).

The filings also show losses for five straight years from FY2010, culminating in accumulated losses of RM83.97 million as at FY2014. The company’s total liabilities amounted to RM328.2 million, some RM24 million of which were current.

Northern Mall’s directors are listed as Jazelan Firhan Jaafar, Zalila Mohd Toon, Datuk Omar Faudzar and Datuk Musa Sheikh Fadzir. Zalila, the former executive director and chief financial officer of Hektar Real Estate Investment Trust, spent 14 years at the REIT before leaving on Jan 31 this year as she planned to “pursue other opportunities”.

The shareholders of Northern Mall are Aseania Development Sdn Bhd (75.35%) and Northern Aurora Sdn Bhd (24.65%). Aseania Development is owned by Aseania Corp Bhd, which in turn is wholly owned by Gold Bridge Engineering & Construction Bhd. Gold Bridge was listed on Bursa Malaysia’s Main Board but was delisted in July 2009.

The directors of Aseania Corp are Musa and Omar while the directors of Aseania Development are Mohd Tahir Ahmad, Omar, Musa and Datuk Abd Aziz Sheikh Fadzir.

As for Northern Aurora, whose business is described as investment holding, its shareholders are listed as Zalila (20%) and Datuk Jaafar Abdul (80%). Jaafar, the former chairman of Hektar, died in January last year.

To recap, AEON Co Ltd signed a lease and infrastructure agreement with D’Aseania Mall in February 2006 and commenced operations in August 2008. However, AEON later initiated legal action against the developer, citing material breaches of agreement. Subsequently, AEON closed its Perda City store on May 30, 2014, and within the same week began operations in a nearby new store.

After AEON’s departure, the owners announced the mall would be closed temporarily for asset enhancement work. It reopened a few months later only to be closed abruptly in August 2016.

 

 

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