Realty fund to invest RM1b in Malaysian malls

PRAMERICA Real Estate Investors (Asia) Pte Ltd will invest some RM1.1 billion in four malls in Malaysia through a real estate fund known as the Asian Retail Mall Fund (ARMF)

Pramerica is the real estate investment arm of US company Prudential Financial Inc.

"We are keen to be part of an economy that remains competitive despite the current financial climate and Malaysia fits the profile," ARMF portfolio manager Bernard Loh told reporters at the launch of the properties yesterday.

Two of the malls, Ampang and SStwo, will be located in the Klang Valley. A third, 1st Avenue, will be developed in George Town, Penang.
The fourth, Island Plaza, is an existing mall in Penang that will be refurbished in the first quarter of next year.

Pramerica has appointed property consultant DTZ Nawawi Tie Leung Property Consultants Sdn Bhd to be the leasing agent and retail mall manager.

DTZ will be in charge of looking for tenants to fill up about 1.8 million sq ft in the four malls.

DTZ senior director Adzman Shah said there still appears to be healthy demand for retail space in Malaysia despite the global economic slowdown.

Retailers are gravitating towards well-run malls in good locations, especially in suburban areas, he added.

"We have received a lot of inquiries and that is a good indication of where the market is going. Most of them know the market will move very fast once it picks up .... people are preparing for the next push," Adzman said.

The Ampang mall, located along the upper end of Jalan Ampang, is to be completed by the first quarter of 2011. Its first phase will comprise a six-level retail podium.

SStwo, built within the SS2 Petaling Jaya residential and commercial area, and 1st Avenue, situated along Penang's Magazine Road, are both expected to open by late 2009.

SStwo is to be a five-level mall, while 1st Avenue - a joint venture between ARMF, Penang's Belleview Group and the Lion group - will have seven levels of retail space, including a dedicated youth level.

"We are offering local, regional and international retailers a different and wider range of retail estate to establish their businesses," Loh said.

ARMF has no plans to acquire more properties in Malaysia for now as its focus will be on the four malls, he said.

On whether the malls would be injected into a real estate investment trust, Loh said it was a possibility that the fund would consider later.

In Singapore, ARMF manages shopping malls such as Tiong Bahru Plaza, Century Square, Hougang Mall, White Sands, Liang Court and Tampines 1.

By Business Times (by Adeline Paul Raj)