This article first appeared in The Edge Malaysia Weekly on November 7, 2022 - November 13, 2022

BOUSTEAD Properties Bhd, the property arm of diversified group Boustead Holdings Bhd, is planning to redevelop the eCurve mall in Mutiara Damansara, Petaling Jaya, into a high-rise residential development that supports multigenerational living.

Industry estimates peg the gross development value (GDV) of the redevelopment — sited on 3.87 acres of freehold land — at between RM500 million and RM700 million. eCurve had housed mmCineplexes, Ampang Superbowl and retail outlets such as Mr DIY, Tony Roma’s and The Manhattan Fish Market before it was permanently closed in March last year for the redevelopment. eCurve is connected to The Curve, which will continue operating as the main neighbourhood mall.

“We are currently focusing on the high-rise residential development that will support multigenerational lifestyles. Upon completion, it will be a prominent new landmark and is set to raise the liveability standards in Mutiara Damansara,” Boustead Properties CEO Khairul Azizi Ismail tells The Edge.

Multigenerational-living units typically house two or three generations under one roof. A household may comprise adults living with their parents or adults bringing their parents to live with them to help with childcare. Single units are sometimes designed to offer privacy for each couple and even include separate entrances.

Boustead Properties’ new plan appears to be in line with the opinions of industry experts that a high-rise residential is the best fit for the site, based on the location as well as market sentiments.

The developer plans to apply for a higher plot ratio for the site and monetise it. “Due to the proximity to the [Surian] mass rapid transit station, the area is gazetted as a transit-oriented development (TOD). As with any other TOD, location-wise, this development will have significant potential in addition to accessibility and being surrounded by plenty of good amenities. Hence, we will be submitting for a higher plot ratio, in compliance with any requirements by the local authorities,” says Khairul.

It is learnt that the plot ratio for the site is 1:4. A source tells The Edge that Boustead Properties is likely to apply for an increase in plot ratio to at least 1:6.

As Boustead Properties is in the process of preparing the technical submissions, it has yet to submit the redevelopment plans to the Petaling Jaya City Council for approval.

Khairul says he is unable to share when the project is likely to be launched. “As we have yet to submit our plans, we will only have more visibility once such a step has been undertaken.”

On how Boustead Properties plans to finance the construction, Khairul says it will be through the sale of the residential units.

In the event the developer manages to obtain a 1:6 plot ratio and the units can be sold for prices similar to those in nearby Taman Tun Dr Ismail or Empire City Damansara, the 168,577 sq ft site could have a GDV of RM500 million to RM700 million, depending on the price of the units, a back-of-the-envelope calculation shows. Glomac Damansara in TTDI, for example, is going for RM700 to RM800 psf, while Exsim Group’s Mossaz in Empire City Damansara, which are leasehold units, are priced at around RM900 psf.

Last March, Boustead Properties had closed down the 14-year-old eCurve for the redevelopment.

In its annual report for the financial year ended Dec 31, 2020, Boustead Holdings says, “In line with the group’s Reinventing Boustead strategy, we aim to refresh our property brand and accelerate digitalisation. As part of this, we are embarking on the redevelopment of eCurve. Drawing on 14 years of success, our aim is to rejuvenate and revitalise the mall as a dynamic landmark in our Mutiara Damansara township, bringing enhanced liveability and new offerings.”

An industry source agrees that it is time for Boustead Properties to review the asset. He highlights that in comparison to some malls within the Klang Valley, eCurve is rather small. He cites Sunway Pyramid, Mid Valley Megamall/The Gardens Mall, Suria KLCC and Pavilion KL, noting that each mall offers over one million sq ft of retail space.

“These malls are vacuum cleaning the industry,” he says, referring to the bigger malls pulling crowds away from the smaller ones. “One cannot remain as a small mall anymore. Boustead Properties would have to look at the best solution for the site,” he adds.

Still, more new malls are sprouting up in the country. LaLaport Bukit Bintang City Centre opened its doors in January, while Phase 2 of IOI City Mall opened in August. Next year, The Exchange TRX, with 1.3 million sq ft of net lettable area, is slated for opening, while Pavilion Damansara Heights Mall has announced its opening in May 2023 with 533,361 sq ft of NLA in Phase 1 and another 529,353 sq ft in Phase 2. It is worth noting that in the vicinity of eCurve, apart from The Curve, there are three other popular retail malls — IKEA, IPC Shopping Centre and Lotus’s hypermarket.

eCurve, which opened in 2006, was formerly known as Cineleisure Damansara. It was a joint venture between Boustead Properties and Singapore’s Cathay Organisation Holdings Ltd. It was reported then that the mall’s NLA was 232,000 sq ft. In 2009, Boustead Properties took full ownership of the mall and renamed it eCurve. Five years later, the mall’s focus was changed to entertainment and leisure, while The Curve took over the role of the neighbourhood mall.

A source tells The Edge that once Boustead Properties had decided to shut the mall, it weighed the possibility of holding the upcoming asset as an investment or selling it. A decision was then made to monetise it.

Asked to comment by The Edge, real estate agency Rahim & Co CEO Siva Shanker says he believes that the most suitable commercial asset to be built on eCurve would be serviced apartments or condominiums with a niche.

He does not think that building a hospitality component on the site would be a good option as Boustead Properties already operates two hotels — Royale Chulan The Curve and Royale Chulan Damansara — in the vicinity. “There’s also an office space glut and people are giving up office space,” he adds.

“Based on highest and best use, serviced apartments may be the best option,” Siva says, adding that the product and timing of the launch are crucial.

“Luxury homes have a snob appeal. Many affluent empty nesters are giving up their large houses and moving into apartments. They could build something for the rich,” he says. He elaborates that these can be large units with luxury interior design.

According to Siva, small units are not selling as well anymore given the rising cost of living.

“The immediate area is well known as a thriving commercial hub with The Curve, IKEA and Lotus’s anchoring as crowd pullers. The surrounding areas in the locality of Mutiara Damansara and Kota Damansara are generally quite established and densely populated. This provides an opportunity for a mixture of nest leavers and upgraders who may be looking for suitable accommodation with features which address post-pandemic needs and demand,” ExaStrata Solution Sdn Bhd CEO and chief real estate consultant Adzman Shah Mohd Ariffin tells The Edge.

“Any mixed-use development — with residential and limited commercial components that can serve the immediate resident population would be good, and able to fill the gaps and be in line with the present trends — stands a good chance of success.”

Companies Commission of Malaysia (SSM) data shows that Boustead Properties made a net loss of RM334.21 million on revenue of RM370.18 million in the financial year ended Dec 31, 2020 (FY2020).

It had total liabilities of RM2.844 billion and total assets of RM4.03 billion as at end-December 2020. It had an accumulated profit of RM439.44 million. In FY2021, parent Boustead Holdings had total liabilities of RM10.98 billion, of which RM7.53 billion were current. Total assets stood at RM16.44 billion.

On the timing of the launch, Siva says given the global uncertainties, a potential risk of a global recession in 2023 and what appears to be now a two-year property cycle (2021 and 2022), “perhaps if they launch in 2024, the property market may have started to see an improvement”.

What’s next for Boustead Properties after eCurve’s transformation? Industry sources believe that the focus is likely to be on reno­vating and upgrading The Curve.

“At The Curve, there are currently many dead corners and there are offices located on the upper floors [with no relation to retail],” an industry observer says, adding that these can be redesigned and rejuvenated to attract foot traffic. The plot ratio can be maximised too.

Experts note that with rising competition in the shopping centre market, it is time for a rejuvenation of The Curve. This is especially so since there has been an evolution in the retail industry where department stores are not performing as well as before, hypermarkets are getting smaller and there is a focus on premium grocers.

According to Boustead Properties’ Khairul, The Curve has had regular maintenance and refurbishment to ensure that it is in good condition to meet its patrons’ comfort, convenience and safety requirements. After re-strategising its tenancy mix, following the pandemic, occupancy level at The Curve is expected to rise to 93% by end-2022 from 89% now.

One of its newer tenants is the KMT Group’s flagship premium Korean grocery store. It occupies some 30,000 sq ft of prime space on the ground floor, which is about 5% of The Curve’s NLA.

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