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SHAH ALAM: I-Bhd and Thailand’s Central Pattana Pcl’s (CPN) upcoming shopping mall, CentralPlaza Regional Retail Mall, in i-City will be part of I-Bhd’s investment properties with a future conversion into a real estate investment trust (REIT).
The REIT conversion will take place at an appropriate time, I Bhd deputy chairman Datuk Eu Hong Chew said in a statement at the signing of several agreements for the joint development, ownership and management of the mall between I-Bhd and CPN.
He said the joint venture (JV) is a comprehensive arrangement with CPN with two elements to be addressed.
“First, the mall is another building block in making i-City a tourism destination. Together with i-City theme park and hotels, i-City will be able to offer a truly 24-hour leisure experience for visitors when the mall opens in 2016.
“Second, the mall will be part of I-Bhd’s investment property plans. As we already own the Data Centre and car parks, the mall will enable us to have a diversified portfolio of investment properties,” said Eu.
Under the JV agreement, CPN will be responsible for the development and management of the mall, while I-Bhd will be responsible for the theme park and the development of other components of i-City.
The JV with CPN has a corporate structure involving three companies — Central Plaza i-City Malls Malaysia Sdn Bhd (I-Bhd 40%/CPN 60%), Central Plaza i-City Sdn Bhd and Central Plaza i-City Real Estate Sdn Bhd.
Central Plaza i-City is a fully-owned subsidiary of Central Plaza i-City Malls Malaysia and will act as the mall’s manager while Central Plaza i-City Real Estate is a fully-owned subsidiary of Central Plaza i-City that will develop and own the mall.
The corporate structure will enable CPN to take the lead in developing, leasing and managing the mall while I-Bhd focuses on the development of other properties in i-City and its leisure business. The corporate structure will also facilitate the conversion of the mall into a REIT.
Including the upcoming RM25 million Red Carpet, Malaysia’s first all-stars interactive wax museum, I-Bhd has invested RM75 million in attractions for its theme park. Eu said it expects to have RM100 million investments in various leisure parks rides and attractions when the mall opens.
With 90,000 visitors a week, the group expects to see an increase in the number of visitors by the time the mall is completed. The developer has started planning the next component of its tourism destination, Clarke Quay@i-City — a river front leisure development with water-based attractions, fine dining and retail.
“Under the terms of the JV, CPN has the first right to participate in the development of Clarke Quay@i-City,” said Eu.
He said the development of CentralPlaza@i-City is the first step in its strategic alliance with CPN.
“Apart from Clarke Quay@i-City, the JV agreement also requires us to offer CPN the opportunity to participate in other retail development by I-Bhd beyond Shah Alam. We are looking to extend the i-City concept beyond the Klang Valley and we hope to be able to bring along i-City’s strategic allies to these developments,” said Eu.
This article first appeared in The Edge Financial Daily, on July 26, 2013.
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