ARA spends RM200m on malls facelift

KUALA LUMPUR (Aug 15, 2013): ARA Asset Management Ltd, one of the largest mall managers in Asia, is spending in excess of RM200 million to refurbish three of its existing malls in Malaysia under its asset enhancement initiatives planned for the coming nine months.

This includes the refurbishment of Klang Parade (RM120 million), Ipoh Parade (RM90 million) and 1 Mont Kiara (under RM20 million), said ARA Asset Management director of portfolio management Thomas Kong.

Over the last 30 months, ARA Asset Management has acquired five Malaysian retail malls under the ARA Asia Dragon Fund, which are Klang Parade, Ipoh Parade, 1 Mont Kiara, Aeon Bandaraya Melaka and Citta Mall at a total investment of over RM1.3 billion. The five retail malls are about 2.7 million sq ft in total, making ARA a key retail mall player in Malaysia.

"Once we refurbished Klang Parade, we expect a 30% increase in footfalls from 8 million last year, and after that it will grow about 5% to 10% a year," he told a press conference on Klang Parade's refurbishment plans and tenant mix unveiling here yesterday.

Refurbishment works of Klang Parade commenced in May this year and the mall is slated to re-open in November-end.

The mall's key anchor and mini-anchor tenants include GSC Cinemas, Kamdar, Parkson, Econsave, Voir Gallery, Ampang Superbowl and more, pushing occupancy rate to 78.5%.

"The average rental rates before refurbishment is at a low single digit and we expect a 20% to 30% increase after the refurbishment as we started from a low base," Kong said, adding that there was no supermarket and cinema as well as less shop units prior to the upgrade.

Klang Parade has a net lettable area of 660,102 sq ft after refurbishment, with a total build up area of 1.7 million sq ft.

On acquisition of new assets, Kong said the Singapore-listed ARA Group is always on the lookout for such opportunities and does not rule out establishing its maiden real estate investment trust (REIT) here in the future. ARA currently has a joint venture in Bursa Malaysia-listed AmFirst REIT, in which it holds a 30% interest.

"For ARA, we're been growing since 2002 when we started, growing from a zero base to managing S$22 billion worth of assets within Asia. Malaysia is pretty much in our plans," he added.