This article first appeared in The Edge Financial Daily, on March 29, 2016.

KUALA LUMPUR: Despite Malaysia’s slowing economy, two major Japanese investors will invest substantially in the landmark redevelopment of the former Pudu Jail site here that is backed by the Employees Provident Fund (EPF).

BBCC Development Sdn Bhd — a special purpose vehicle set up to undertake the proposed RM8.7 billion Bukit Bintang City Centre (BBCC) development — yesterday signed heads of terms agreement with Japan’s Mitsui Fudosan (Asia) Pte Ltd and Sony Music Entertainment (Japan) Inc subsidiary Zepp Hall Network Inc to develop a 1.4 million sq ft lifestyle mall and a concert hall that can house an audience of over 2,000 respectively, within the development.

“Despite the slowdown of China’s economy and the weakened ringgit, we believe that the consumption of Malaysians is still very high with the higher number of young people,” Mitsui Fudosan (Asia) deputy managing director and chief regional officer for Malaysia Takehito Fukui told 

TheEdgeProperty.com on the sidelines of the signing ceremony yesterday.

“2015 saw a 5% growth rate in Malaysia’s gross domestic product, and we foresee a higher economic growth in the near future,” he said.

Fukui said the group also believes Malaysia is the right place to invest due to its location and the encouraging response to its Mitsui Outlet Park at the Kuala Lumpur International Airport in Sepang.

“We will be bringing in Japanese brands to the mall, and with our tremendous experience in mall design, management and operation skills, as well as our relationship with a large network of Japanese and international retailers, the partnership will help BBCC realise the best mall design with the best tenant mix and management standards,” he said.

Mitsui Fudosan (Asia) and BBCC Development are proposing to develop the retail mall under the Mitsui Shopping Park LaLaport brand — a regional mall concept first conceived by Mitsui Fudosan about 35 years ago, which evolved from “a place where people gather” to “a place where people interact”.

According to BBCC Development chief executive officer Datuk Richard Ong, the estimated gross development cost (GDC) of the mall and concert hall is RM1.6 billion and RM400 million respectively.

“We will commence work sometime in the third quarter of this year and the mall is set to be completed in 2021,” said Ong.

The mall will be developed and operated by Mitsui Fudosan (Asia) and the shareholders of BBCC Development — Eco World Development Group Bhd (40%), UDA Holdings Bhd (40%) and the EPF (20%) — through an establishment of a joint-venture company (JVCo).

The JVCo will be 50% owned by Mitsui Fudosan (Asia), while the remaining stake will be owned by BBCC Development, with the RM1.6 billion GDC split equally as well.

“Mitsui Fudosan’s investment in the JVCo will be its largest retail investment outside Japan. This signifies its confidence in the continued growth of the Malaysian economy,” said EcoWorld chairman Tan Sri Liew Kee Sin in a statement yesterday.

“It is also a testament to Malaysia remaining an attractive destination for international foreign direct investment, and reaffirms the fact that there is a positive future outlook for the country,” he added.

BBCC Development also yesterday inked a memorandum of understanding with international serviced residence owner-operator The Ascott Ltd, a member of Singapore’s CapitalLand Ltd to bring the brand of serviced residences to BBCC.

“Since Ascott entered Malaysia in 1999 with our first property in Kuala Lumpur, we have grown to be the largest international owner and operator of serviced residences in the country with more than 3,000 apartment units across 14 properties,” said Ascott chief executive officer Lee Chee Koon.

Meanwhile, BBCC Development aims to launch its other phase 1 components — two blocks of 680 units of entry-level apartments starting from 450 sq ft and a 45-storey office tower with 350 units ranging from 715 sq ft to 1,423 sq ft before the middle of this year.

“The prices of the offices are set to be at approximately RM1,400 to RM1,500 per sq ft. We are still in the midst of setting the price of the residential component. We have received quite a good response of interest for our office units,” said Ong.

The serviced apartments opened for registration of interest last weekend.

BBCC sits on 19.4 acres (7.8ha) of land and has a gross development value of RM8.7 billion.

The planning approval for this project, which was obtained in August last year, comprises six blocks of serviced apartments, a retail and entertainment block, a four-star hotel with branded residences, a strata office, and an 80-storey signature tower housing a five-star hotel, luxury residences and corporate offices.