Mah Sing Group Bhd will reach an important milestone this month — the soft opening of its first retail mall at its recently completed Southgate development in Sungai Besi, Kuala Lumpur.

Southgate is an integrated commercial development with retail and office components. The mall takes up of two floors of the retail podium, which is located below the offices.  It will have a net lettable area (NLA) of 200,000 sq ft and feature more than 100 stores. The mall’s carpark has about 1,200 parking bays.

Some tenants will be opening their doors for business during the mall’s soft opening on July 20. Southgate’s official launch is slated for mid-August.

The inspiration for Southgate came from Shanghai, Mah Sing Properties Sdn Bhd COO Andy Chua tells City&Country.  “When the land for Southgate came on the market, we were very interested because we could see that it had the potential for a commercial development,” he says. “At the same time, we were looking at Xintiandi in Shanghai, and we wanted to have a similar kind of ambience and vibrancy, especially for F&B, and we wanted to bring that concept to Kuala Lumpur.”

Xintiandi in Shanghai is an urban tourist attraction with an exclusive historical and cultural heritage. The city centre is one block south of Huai Hai Zhong Road and a Metro station and covers about 7.4 acres. F&B, retail, entertainment, cultural, recreation, commercial and residential facilities operate out of restored “Shikumen” houses — an old form of building architecture only found in Shanghai. In all, the area offers 6.5 million sq ft commercial gross floor area. Xintiandi won the national 2001 Innovation China Architecture Award, 2002 AIA Hong Kong Citation and 2003 Award of Excellence from US-based Urban Land Institute.

Southgate has a gross development value of RM466 million and sits on 4.76 acres of freehold land, purchased in 2007 for RM52 million or RM250 psf. It is located on Jalan Tun Razak/Jalan Sungei Besi  just 10 minutes from the Kuala Lumpur city centre. Chua notes that it is located at the southern gateway of Kuala Lumpur, whhich is how Southgate got its name.

“Southgate has more than half a million people passing through daily, making it an ideal location for offices and retailers,” says Chua.

The main anchor tenants at the mall are fashion label Nichii and fitness centre Gorgeous Fitness, which have a combined floor space of 30,000 sq ft.

The retail units, which ranged from 535 sq ft to 2,105 sq ft, were sold on a strata basis and have been fully taken up.  Mah Sing did not retain any of the units, which were sold at an average of RM1,100 psf.

The retail podium is presently managed by Mah Sing Properties, which will take charge of the tenant mix. Chua explains that the company will manage the mall until a Joint Management Body (JMB) is established, after which, Mah Sing will let the owners decide if they wish it to continue as the property manager. Chua explains that about 50% of the retail units will be F&B outlets and the remainder will consist of other retailers and convenience stores like optical shops, fashion boutiques and beauty centres.

The retail podium comprises the ground floor and level two of the Southgate development. Rental rates for the ground floor are between RM8 psf and RM12 psf while that for level two are between RM5.50 psf and RM8 psf.

Southgate’s design aims to ensure an environment that is pleasing to the eye and encourage people to mingle outdoors. Chua says the whole development has been WiFi-enabled so that visitors will be able to surf the net while enjoying their coffee outdoors and office workers will able to work outside the buildings.

Other than the comfortable outdoor space, creating the right ambience for shoppers and office workers was also important, says Chua. An ambience consultant was brought in to create the right mood and feel for the place for people to unwind and relax. The design included the careful placement of the walkways and water features. Mah Sing also hired a lighting consultant while the landscaping was done by its in-house landscape consultant. Chua adds that the project’s clean and contemporary architectural lines also lends itself to the overall ambience.

Chua says the retail mix benefits both workers and visitors. “The office population will want to have F&B outlets nearby for the employees and also their clients and customers,” he says. “Nowadays, when you discuss business, it is no longer in a corporate setting and can be conducted over coffee downstairs. That is more personal.”

Southgate’s office units cover a net lettable area of 400,000 sq ft.  Like the retail units, they have all been sold.  Unit sizes range from 587 sq ft to 1,723 sq ft and they were sold at an average price of RM600 psf.

About 50% of the offices will open soon while the remainder are still untenanted. The asking rent is between RM4 psf and RM5 psf. Chua explains that the offices are designed to cater for service-oriented companies such as advertising agencies, architectural companies and law firms.

There is no residential component in the development. “We felt that residences would not be so suitable because there are already a lot of residential developments in the KL city centre,” says Chua. “We also felt that KL did not have a good retail-cum-office development and that Southgate’s present concept would be more appropriate for the location that we are in. We also wanted to introduce a new concept to the KL property landscape.”

Moving forward, Chua reveals that Mah Sing intends to replicate Southgate’s concept either locally or abroad, “provided the site suits this type of development”. The maximum size for this future project is five acres. If the land size is larger, the concept may vary to take advantage of the additional space although the main concept and theme will remain the same, says Chua.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 867, July 18-July 24, 2011