This article first appeared in City & Country, The Edge Malaysia Weekly on August 22, 2022 - August 28, 2022

The atmosphere at KIPMall Masai in Pasir Gudang, Johor, is rather lively on a Friday afternoon, with the friendly faces and chatter of vendors and visitors brightening up the space. The three main areas of the mall — divided into retail, food and fresh produce — exhibit a high level of cleanliness and organisation.

Thus, it is no surprise that KIPMall Masai was a Silver winner in the 10 Years and Above Specialised Categories. Owned by KIP REIT Management Sdn Bhd and managed by Henry Butcher Malaysia (Mont Kiara) Sdn Bhd (HBMK), the community-centric hybrid mall has maintained its standards since opening its doors in 2010.

It has attracted visitors from areas in the vicinity such as Tamai Masai Utama, Taman Masai, Taman Bukit Layang-Layang, Taman Mawar, Kampung Sungai Rinting, Kampung Pasir Gudang Baru and Kampung Sepakat, as well as other areas of Johor Baru and even Singapore. The mall is easily accessible via the Pasir Gudang Highway and other major roads such as Jalan Serangkai, Jalan Seharum and Persiaran Dahlia. Public transport such as taxis and buses via the Iskandar Malaysia Bus Service System is also available.

The leasehold development has a total land area of 472,757 sq ft, with a net lettable area of 163,511 sq ft. KIPMall Masai is currently 92% occupied with more than 200 tenants. Anchor tenants include Watsons, RHB Bank, Mr DIY, Guardian, Hwa Thai Supermart, Metro Optical Group, Mr Bike, Jalan Jalan Japan, Celcom and Marrybrown.

Following our visit to the mall, the warm and approachable Datuk Eric Ong, executive director of KIP REIT Management, tells us via Zoom: “We are very happy about the recognition of our sustainability effort, and that it has not gone unnoticed. We are proud of our HBMK and KIP Property Services team, which successfully navigated through a challenging period during the pandemic without compromising on the quality of our asset.

“Sustainability is fast becoming many stakeholders’ key priority in assessing the performance of an entity and we continue to integrate sustainability considerations into our day-to-day operations.”

He also addresses the challenges the company faced. “What we went through [during the pandemic and now in transitioning to the endemic phase] was something unexpected, and it has been a good learning experience for all of us in the business community. Likewise with sustainability and environmental, social and governance (ESG) issues, we have to be more prepared for such unforeseen eventualities.”

Ong says footfall at the mall has improved a lot since the reopening of borders, especially with visitors coming over from Singapore. “We are back to pre-pandemic levels. Back then, KIPMall Masai was half the size of what it is today, and we are glad that it is continuously growing and thriving.”

Ong highlights the mall’s distinct business proposition. “The concept and design of KIPMall Masai is indeed unique. Our focus is on the mass market, which is the key pillar of our business model,” he says.

“We aim to look for tenants whose businesses are targeted for their competitive pricing and attractiveness to the shopper profile. Over time, we have developed a brand as a one-stop shopping destination for essentials at competitive prices.

“This is one of the draws, which attracts both B2B (business-to-business) and B2C (business-to-consumer) shoppers. We do not particularly target either category but we want to be a platform to cater for the wider market.”

Ong continues, “Our goal is to strike a balance between the demands of our stakeholders and shoppers, and how they prefer to do business, and also which stock [inventory] is a necessity to ensure that KIPMall Masai remains attractive. We constantly monitor the tenant mix. We look at feedback from our shoppers, and it is an ongoing process.”

It is not just about profitability for the company. The management also helps the local operators to run their business and guide them in catering to the shoppers to ensure the sustainability of their business in the long term.

“It is our way of providing a platform to some of the local traders here. Those tenants leverage our [KIP] brand to propel their business forward. We continue to strike the right balance between rental and occupancy rates to encourage long-term relationships with our tenants,” says Ong.

According to him, the group continuously assesses the tenancy and the maintenance of the mall. “This is all part and parcel of the conduciveness we offer to shoppers. We have to ensure that everyone and everything abides by our SOPs on a daily basis.”

Collectively, the group and property manager of KIPMall Masai strive to implement a level of innovativeness. “With the population growth, we try to engage with new, young shoppers to tap into their [demands]. We observe the patterns and behaviours of online shopping and social media, and we have plans to expand our footfall and traffic to other age groups as well. Part of our work is engaging with potentially more new shoppers,” he says.

“Consumer behaviours change rapidly, hence we encourage our tenants to adopt new technologies in their business. Some of our tenants are mom-and-pop businesses and have smaller operations, so we help them leverage our social media platform [which has a following] to enhance their business. We also encourage our tenants to offer cashless or QR payments, among other technologies.”

KIP REIT Management intends to leave its mark by improving on ESG factors in the communities. “We want to ensure the property is able to withstand challenging times, and that the immediate community grows with us,” says Ong.

The group is particularly proud of KIPMall Masai’s solar photovoltaic systems, one of which produces 428kWp of electricity while the other has the capacity for 165.1kWp. Both are connected to the main switch board that supplies power to the air conditioners in the mall.

The group and HBMK have also implemented a set of key performance indicators (KPIs) called the Appraisal Goal Setting for the maintenance crew to fulfil. “This KPI is monitored on a monthly basis and will be reflected in the maintenance crew’s yearly performance review,” says Ong.

The cleanliness of the mall, which is highly noticeable, is handled by An Nur Kleen Maintenance Sdn Bhd, with a total of 12 personnel deployed. The landscaping in the surrounding area is also properly managed and handled by the cleaners.

The group has also implemented an asset enhancement initiative (AEI) at Auto Mall, a part of KIPMall Masai. The main objectives are to increase income, to fill up vacant lots at Auto Mall, to bring in an electrical shop for a better trade mix and to bring more footfall to the area.

“The cost of the AEI project was RM203,780. The income generated per year from this project is RM209,400,” says Ong.

In terms of cost optimisation, the most significant difference between what was budgeted and the actual figure would be in terms of total expenditure. “It was budgeted at RM336,432, but the actual expenditure only came to RM200,265. This significant difference of around 40% was caused by the pandemic, as minimal works and activities were done inside the development,” he says.

The group aims to benchmark KIPMall Masai and all of the malls in its portfolio in the long term. “Our long-term vision is to be the main destination for shoppers there. Over the years, we have recognised our [target audience] which is also made up of foreign workers with unconventional working hours. So, we have quite a diverse group of shoppers who come in at different times of the day. The factors to consider here are mostly geographical and cultural,” says Ong.

“In the long term, we will continue to observe trends. One of the things we would like to implement at KIPMall Masai is a proper F&B section, and we are currently having discussions about it. At present, since the renovation to accommodate Jalan Jalan Japan at KIPMall Masai, we do not have any plans for an extensive AEI, but will initiate such a programme if necessary.

“In the meantime, we will continue to maintain the conditions of our mall by focusing on our core strengths of leasing, marketing and maintenance such as repainting and doing something about the road premix and glass panel, as well as improvement of the air ducting system in the food court.”

According to Ong, KIP REIT Management has a portfolio of six malls in several cities and towns across the country. “We do look at opportunities to include more properties in our portfolio, and to integrate our sustainability efforts into them, including ESG measures. In our annual report, for this financial year, we also have a bit of an improvement in how we track these.

“Diversity and inclusion are important to us because people management is one of the key things for our performance, while in terms of governance, we also have SOPs that we comply with and revise according to the changing business environment.

“During the pandemic, we looked into energy and water consumption very closely. I think that was the reason why we changed our operating times as well, because we knew that certain times of the day were restrictive to people who wanted to come in. We also explored initiatives that covered subjects such as waste management, while educating shoppers on its importance.”

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