PETALING JAYA: WCT Holdings Bhd expects some 19 million shoppers to patronise its Paradigm Johor Baru mall in the first year of its opening planned for the third quarter of 2016.
WCT executive director Choe Kai Keong said in an interview that the Johor Baru retail market is underserved and the developer’s visitor projection is “a conservative one”.
Choe says Paradigm JB’s net lettable area has been 50% taken up so far with confirmed tenants being SOGO, GSC cinema and Village Grocer.
“Paradigm JB mall has secured 50% tenancy. Currently, we are in the midst of negotiations with another few key junior anchors such as fashion, sports, toys and book distributor brands. We are also being approached by fashion brands such as Topman and Zara,” said Choe.
Despite the current soft consumer sentiment, WCT managing director Taing Kim Hwa says the company has no plans to postpone the launch of Paradigm JB.
“What we have started we will carry on, we cannot stop. We are confident in the Johor retail market,” Taing said.
According to the appointed retail mall consultant Robert P Jalleh, managing director of Retail Network Sdn Bhd, there is a population of two million within a 20-minute drive of Paradigm JB, which is located on Jalan Skudai.
“With a 1.3 million sq ft net lettable area and key features, such as the first ice-skating rink in the region, Paradigm JB can certainly draw more shoppers but we are just being conservative. I believe it will not stop people who live beyond 20 minutes driving time to visit the mall,” said Jalleh.
He added that Paradigm JB will become a super-regional mall that will be “a huge magnet to draw people in”, including Singaporeans.
“The mall is designed to be comparable to Singapore malls, given that Johorians are very much exposed to Singapore malls,” Jalleh said.Jalleh believes the retail market will see improvement by this year-end.
“The [market at the] beginning of this year is poor because of a lot of factors such as the implementation of the goods and services tax, the weakening ringgit and political instability. We must bear in mind, according to research, the Johor market is underserved and Malaysia’s retail market is domestically driven. We are confident that Johor Baru is a very good option to expand the Paradigm brand,” Jalleh said.
With six levels of retail and 4,200 parking bays, the mall is part of a mixed-use development that also consists of a 24-storey serviced apartment block and a 17-storey four-star hotel. The project’s gross development value is RM1.8 billion.
Taing said WCT plans to launch the 296-room hotel in 2017, a year after the opening of Paradigm JB. Meanwhile, the official launch of its 263-unit serviced apartment project called BRIO will take place early next year.
Over at its first Paradigm development, Paradigm Petaling Jaya, The Azure Residences serviced residences has registered 60% take-up rate so far, said Taing.
“We are hoping to secure 80% take up by year-end. In the current market situation, I think 60% is not too bad. I believe when there is less construction work [on the project] in another few months, people will start to appreciate the environment and location,” Taing said.
He added that the 30-storey building is now 60% to 70% complete. The development will have 189 units of apartments ranging in size from 756 sq ft to 1,815 sq ft. It is due for completion by the third quarter next year.
WCT plans to continue to build its shopping mall business for recurring income.
“Malaysia still has opportunities if the economy grows steadily, the population increases and there is political stability. We will continue to build new malls if the opportunities arise. We may also revisit the Vietnam market, which we have been eyeing for a few years.
“However, we still have a couple of things to do here, such as Paradigm JB, and Paradigm KL located at Overseas Union Garden, Kuala Lumpur. We target to open its doors in 2018. For now, WCT will focus on Malaysia,” said Taing.
This article first appeared in property+, a section of the digitaledge Daily, on Aug 7, 2015. Download property+ here.