|Aman Central will create a new centre of activity in Alor Setar with its wide retail and entertainment choices|
VISITING the capital of Kedah, Alor Setar, which is a little over an hour’s flight from Subang, was an eye-opener. From the airport, driving past vast tracts of padi fields brought with it a nostalgic feeling of a much simpler time. It wasn’t long before we reached Alor Setar city. It looked a lot like Ipoh, the capital of Perak, with a laidback feel, a welcome respite from the fast-paced Kuala Lumpur city. However, more development is coming to Alor Setar, and that could be a catalyst for it to become an economic hub in years to come.
One reason for this is the activities of Penang-based property developer Belleview Group, which is building an iconic lifestyle shopping mall called Aman Central. Sitting on 7.03 acres of freehold land, Aman Central will be the largest mall in the city and Kedah as well as one of the largest in the northern region. The mall is situated opposite the second tallest telecommunications tower in Malaysia, Menara Alor Setar, and is on Lebuhraya Darul Aman, the main thoroughfare that cuts through the city and passes the royal palace.
Originally, the site had on it a 30-year-old abandoned project. Belleview was invited by the Kedah government to revive it and upon seeing its potential, acquired the property in 2011. The gross development cost of Aman Central, including the land and building, is RM500 million. When completed, the mall will have a net lettable area (NLA) of 800,000 sq ft, covering eight levels, including two basement levels. There will be 1,700 parking bays and 330 shoplots with an average size of about 1,000 sq ft.
“We worked with designers and architects of RDG Design of Toronto, Canada, which specialises in shopping malls, and its partner in Malaysia, GDP Architect, to design the mall,” says group managing director Datuk Sonny Ho.
“The architecture of the mall, the layout of retail outlets and the location are drawing good response. And since there is no competition in Alor Setar, I have the privilege of picking the right tenants,” he says. “We have already leased out 50% [of the retail space].”
Ho says signing up tenants was not difficult as many retailers are on the lookout for suitable locations to expand their business in Alor Setar.
“For many cities, when you want to build a shopping mall, you have to think very hard to find the USPs or unique selling points, but for Aman Central, the USPs are simple,” explains Ho. “Firstly, it is the size, and there was no complete lifestyle mall under one roof in Alor Setar. Also, the people here are looking for brands that have not been in their city before, while the retailers of these brands are looking for a place to expand to Kedah.”
|The architecture of the mall, the layout of retail outlets and the location are drawing good response. And since there is no competition in Alor Setar, I have the privilege of picking the right tenants.” — Ho|
Ho shares that Parkson was the first tenant to sign up without much persuasion. Parkson CEO Toh Peng Koon is originally from Alor Setar and had been looking for a place to set up an outlet in his hometown, he reveals.
“Normally, you can gauge the confidence of the anchor tenant by the size of the space it takes up,” he explains. “Initially, we proposed 80,000 sq ft, but after Parkson did its research, it wanted 100,000 sq ft. Then 120,000 sq ft, until we arrived at 140,000 sq ft.”
The other anchor tenant is Golden Screen Cinemas (GSC), which will have 10 screens. About 75% of the tenants will be first-timers in Alor Setar, including the anchor tenants, Padini Concept Store and Starbucks.
The rent ranges from RM5 to RM30 psf, says Ho. The higher-end rent is for tenants on the ground floor and those selling fashion brands. The RM5 psf rent is for junior anchor spaces that exceed 10,000 sq ft.
“I am actually putting the rent at 30% lower than that of prime malls in Penang. But compared with the smaller shopping centres in Alor Setar, our rent is higher,” says Ho.
At present, there are seven shopping centres in Alor Setar. Three of them — Kompleks MPKS cum City Plaza, Star Parade and Alor Star Mall — are considered proper shopping centres, while Sentosa Plaza is an information technology mall. The rest are hypermarkets.
Rents vary from mall to mall. According to PPC International Alor Setar branch’s associate director Norakmal Mohd Salleh, ground floor rent at Star Parade ranges from RM8 to RM11 psf, while the first floor rents are from RM6 to RM8 psf.
According to Kedah’s Rahim & Co Chartered Surveyors executive director Mohammad Nor Umar, the average rent ranges from RM3.50 to RM15 psf, inclusive of service charges. He adds that ground floor units with good location and accessibility may command rent of RM14 to RM15 psf.
C H Williams Talhar & Wong’s Alor Setar director Ainuddin Jalaini Ismail says the total NLA of Alor Star Mall, City Plaza, Star Parade and Sentosa Plaza is about 1.26 million sq ft. Of that, 833,945 sq ft is occupied, giving an occupancy rate of 66.4%.
He adds that the market for shopping centre space in Alor Setar is generally stagnant although he believes that Aman Central will bring strong competition to the existing shopping complexes.
Aman Central bodes well for Kedah residents in terms of convenience. Besides bringing a new shopping experience, Aman Central is deemed to be a regional mall, where it will cater for shoppers from the northern region and parts of southern Thailand, Ho says.
The catchment population is estimated at four million people, with Alor Setar contributing 500,000. Neighbouring towns of Kangar, Jitra and Sungai Petani are expected to contribute 1.6 million people, and northward to south Thailand and southward to Seberang Prai, another 1.95 million people.
Ho points out that the catchment population in Alor Setar, which is a five to 15-minute drive from Aman Central, is made up of the middle-income households.
“The feedback from retailers at our malls in Penang is that they are not only doing Penang people’s business but also Kedah people’s business,” says Ho, who developed and manages 1st Avenue, a mall in George Town, Penang.
Growth of Alor Setar
With this exciting new mall in the city, greater economic activity and higher property prices in the vicinity of Aman Central are expected. Ho says it is envisioned that the new mall will improve the lifestyle of the people and add excitement to Alor Setar’s streetscape. He believes Aman Central will be as iconic as Menara Alor Setar.
“Hopefully, these developments will translate into economic improvements, be it in terms of employment or business, because there will be a big shift of local traders to this area,” he says. “The size of the mall is just right. It will attract enough customers for these new businesses, and hopefully, Aman Central will be a benchmark project for the state, and draw more investments to Alor Setar.”
WTW’s Ainuddin concurs with Ho. “By offering a new shopping experience, we believe that Aman Central will enhance the supply and occupancy rates of shopping space in Alor Setar. The demand for surrounding shopoffices and shophouses such as those in Jalan Putra, Jalan Gangsa and Jalan Pintu Sepuloh is expected to increase.”
Meanwhile, property prices of nearby shophouses have already increased.
“I remember 3-storey shophouses were going for RM600,000 to RM800,000 two years ago, and today, they are selling for about RM1.5 million,” Ho says. “I believe it has something to do with the development of Aman Central.”
Property consultants in Alor Setar also agree that property prices in the vicinity of Aman Central will appreciate in the near future.
“I strongly believe that property prices in the vicinity of Aman Central will increase around 20% to 30%,” says PPC International’s Norakmal. “Unfortunately, it is difficult to provide examples of price movement as there are too few comparisons available. One that I can think of is Village Mall in Sungai Petani. Before the development of this mall, 3-storey terraced shopoffices along the main road of Jalan Badlishah were going for RM600,000 to RM650,000 each, but now, the same properties are worth at least RM800,000.”
Rahim & Co’s Mohammad Nor says, “Of course, Aman Central will affect the neighbourhood’s property prices. About four to five years ago, a standard 3-storey shophouse was worth RM350,000, but now, it is around RM800,000.”
He also highlights that possibly because of Aman Central, a new budget hotel and several 3-storey shophouses have been built recently. This could be in anticipation of an increase in human traffic in the area in the years to come.
WTW’s Ainuddin says, “In 2009, a 4-storey shopoffice in Jalan Pintu Sepuluh, Alor Setar, was going for RM770,000. Last year, which is a year after Aman Central was launched, the selling price rose 10% to around RM850,000. In view of this, the prices of commercial properties around Aman Central will potentially increase 10% to 20%, particularly when the mall is completed in 2015 and begins operation.”
While the development of Aman Central has become the talk of town, Belleview’s activities in Alor Setar did not stop there. The developer has three other projects — a condominium project called Amansuri Residences, a hypermarket mall development and a hotel, all minutes away from each other.
Currently under construction, Amansuri Residences is the first condominium project in Alor Setar and has a gross development value of RM200 million. It will feature two blocks consisting of a total of 277 units. The built-ups start from 1,248 sq ft, and Ho says it will be completed next year.
He adds that the hypermarket mall has been leased to a leading Japanese hypermarket operator, but he’s unable to reveal its name at the moment. The hotel is in the planning stage and no details are available yet.
|Left: An artist’s impression of the al fresco dining experience and the expansive design of the mall.
Right: The interior of the mall where about 75% of the tenants will be first-timers in Alor Setar
With so much on Ho’s plate, he continues to build his team of professionals to take Belleview to the next level.
“I go for professionals, and those employed are good in their own fields. I don’t believe in the ‘one-leg-kick’ type of management,” he explains.
Ho adds that the company’s operations are gradually achieving a 70:30 ratio for commercial and residential developments. The increase in commercial development will eventually see Belleview set up a real estate investment trust (REIT).
“The plan for a REIT is on track, and we are looking at a REIT size that is much larger than previously planned,” Ho says. “We have acquired land in Seberang Prai for a mixed-use development project and we are also going into the design, building and leasing of hypermarket malls with a single tenant with a long lease.” The Seberang Prai project will feature a mall with an NLA of 1.5 million sq ft, 970 small office/home office units and a four-star hotel. The mall alone will have an estimated GDV of RM2 billion.
“We are happy with the hypermarket mall business as we are doing it in many places, such as Alor Setar, Sungai Petani, Seberang Prai and Kulim. Most of the locations are secured.”
Belleview’s continual expansion in the northern part of Peninsular Malaysia bodes well for the people of Kedah and the surrounding areas. The rice bowl of Malaysia is slowly coming into its own.
This article first appeared in The Edge Malaysia Weekly, on November 25, 2013.
TOP PICKS BY EDGEPROP
[ Confirm Rental Get RM 3000 ] Students Condo
[ Europe Style Duplex Condo ] ROI 9% Cash Back
[ READY TENANT+ COVER INSTALLMENT ] Hotel Suites
Camellia Residence @ Bandar Tasik Kesuma
Pangsapuri Baiduri, Bandar Tasik Kesuma
[ CORNER LOT ] 2 STY TERRACE TMN WARISAN PUTRA
Perumahan Baru Jalan Pipit Telok Panglima Garang
Telok Panglima Garang, Selangor