Klang Valley malls performed slower last year due to competition
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Stronger performances from Gurney Plaza and East Coast Mall compensated for a lower contribution from CapitaLand Malaysia Mall Trust’s Klang Valley shopping malls last year. CapitaLand Malaysia Mall REIT Management (CMRM), which manages CapitaLand Malaysia Mall Trust (CMMT), released its results this week, revealing net property income of RM215 million (US$52.57 million) for the year. Its distributable income was RM161.3 million.
“Gurney Plaza and East Coast Mall, which collectively accounted for about 68 per cent of CMMT’s net property income, continued their growth momentum last year,” said Low Peck Chen, CEO of CMRM. “This helped to moderate the lower contribution from our Klang Valley malls, which continued to be affected by increasing competition in the vicinity, as well as downtime for asset enhancement works and lower rents at Sungei Wang and The Mines.”
During the final quarter of last year, the company completed the asset enhancement works at Gurney Plaza’s Level 4 and improved the tenant mix at East Coast Mall’s ground floor. Tenants, several of them new to Penang and Kuantan, have progressively commenced operations at the newly renovated spaces.
“We expect the completed asset enhancement initiatives at both malls to contribute positively to our performance going forward,” said Chen.
In Kuala Lumpur, Sungei Wang’s reconfiguration of its annex is on track and new-to-market and novel experiential concepts will feature in the Jumpa lifestyle zone when it opens in the second half of this year.
“We expect the completed asset enhancement initiatives at both malls to contribute positively to our performance going forward,”
“We continue to refresh our tenant mix to meet the diverse needs of our shoppers, who can now find popular stores like Huawei, Sport Planet and Mr DIY at 3 Damansara, as well as home improvement store SSF and children activity centre Olympic Kids Club at The Mines,” said Chen. “At Sungei Wang, the newly renovated main anchor Giant will soon unveil a fresh concept to draw more shoppers.”
David Wong, chairman of CMRM, said that against a backdrop of “increasing uncertainties in the global economy and concerns around the rising cost of living,” the company expects consumer and business sentiments to remain cautious this year.
“Despite the challenging operating environment, we will continue to strengthen CMMT’s performance by proactively managing lease renewals and exploring opportunities in asset enhancement initiatives and acquisitions that will create value for our Unitholders.”
CMMT is a shopping mall-focused Reit with five shopping malls: Gurney Plaza in Penang, a majority interest in Sungei Wang in Kuala Lumpur, 3 Damansara and Tropicana City Office Tower in Petaling Jaya, The Mines in Seri Kembangan and East Coast Mall in Kuantan, Pahang. The portfolio has a total net lettable area of more than 2.9 million sqft and was valued at RM4.1 billion at the end of last year.
Questions & Answers
Q.Which specific malls are included in CapitaLand Malaysia Mall Trust's Klang Valley portfolio?
Which specific malls are included in CapitaLand Malaysia Mall Trust's Klang Valley portfolio?
The Klang Valley malls in CMMT's portfolio include Sungei Wang in Kuala Lumpur, 3 Damansara and Tropicana City Office Tower in Petaling Jaya, and The Mines in Seri Kembangan. These contributed less last year.
Q.What initiatives are being undertaken to improve the performance of Sungei Wang?
What initiatives are being undertaken to improve the performance of Sungei Wang?
Sungei Wang is reconfiguring its annex, which will feature new-to-market and novel experiential concepts in its Jumpa lifestyle zone later this year. The main anchor, Giant, is also unveiling a fresh concept.
Q.How did the asset enhancement works at Gurney Plaza and East Coast Mall contribute to their performance?
How did the asset enhancement works at Gurney Plaza and East Coast Mall contribute to their performance?
The completed asset enhancement works at Gurney Plaza's Level 4 and the improved tenant mix at East Coast Mall's ground floor have led to new tenants commencing operations and are expected to positively contribute to performance.
Q.What is the total value of CapitaLand Malaysia Mall Trust's portfolio as of the end of last year?
What is the total value of CapitaLand Malaysia Mall Trust's portfolio as of the end of last year?
The entire portfolio of shopping malls and the office tower, including Gurney Plaza and the Klang Valley malls, was valued at RM4.1 billion at the end of last year. This encompasses over 2.9 million sqft of net lettable area.
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