After gaining valuable lessons from its maiden project, Mainstay Holdings Sdn Bhd is now ready to step up its game. The developer of Space U8 mall in Shah Alam is getting ready to embark on new projects, including an ambitious plan to set up a branded retail mall on the fringes of the Klang Valley.
While Mainstay Holdings is looking to launch its first two residential projects — in Dengkil and near Putrajaya — by the third quarter of this year, it is also working towards establishing the branded retail mall in Sepang, Selangor. Chairman Raja Mohd Azmi Raja Razali tells City & Country that the company is about to acquire a 40-acre tract from a public listed developer to build the branded retail mall, with a lifestyle entertainment area next to it.
The developer also signed a memorandum of understanding (MoU) in May with US-based branded outlet mall operator Horizon Group Properties Inc. According to its website, Horizon Group owns and develops factory outlet shopping centres in the US and the developer of a master planned community in suburban Chicago.
“We are quite excited about this as it is also Horizon Group’s first joint venture (JV) to develop and manage a branded retail mall in Malaysia. They are the experts who will bring in the foreign brands to the mall,” says Raja Azmi, who was formerly the CEO of Fly Asian Xpress Sdn Bhd, now renamed AirAsia X. “As it is located just five minutes to Kuala Lumpur International Airport (KLIA), we plan to turn it into a tourist destination.”
Mainstay Holdings will build shopoffices for entertainment outlets and alfresco cafés just outside the mall, which could be modelled after the concept of Paris’ Euro Disney, he adds.
The estimated gross development value (GDV) for the proposed 200,000 sq ft branded retail mall and lifestyle entertainment area is RM400 million, with construction expected to be completed by early 2015. There are also plans to acquire surrounding tracts for possible developments of residential components, hotels and a theme park, which Raja Azmi says could keep the developer busy for the next 5 to 10 years.
“We are bringing what we have learnt from our experience in Space U8 to this development, as this could possibly be our flagship development.”
The four-level RM200 million Space U8 mall, which was completed in 2011, has a cineplex, bowling alley, supermarket, IT centre and soon-to-be opened karaoke joint as main tenants.
It was initially conceived as a shop unit mall office (SUMO) concept but was later transformed into a green mall. It is dubbed Malaysia’s first “eco-mall”, with close to RM10 million spent on green features including rainwater harvesting, solar panels on the roof to supply sufficient electricity to the common areas and using used tyres for the foundation, which reduces the building’s temperature and helps maintain the central courtyard’s temperature at 25°C.
“We made the changes from SUMO to a green mall because we wanted to take advantage of the 70,000 sq ft courtyard. The biggest event held there so far is Versus tv9 battle of the band, which was held recently. We are also looking at music events and all sorts of other events to attract people to Space U8,” Raja Azmi says.
He adds that the mall is currently 40% occupied. “It could be better but from a development point of view, the units are all sold out. We are trying to get more tenants in. It would have been different if we owned the whole mall ... then you can offer things like free rentals, like some other malls are doing. “It was our first development and we sold the units to recoup our investment. But we still wanted some form of control so we signed sale and leaseback agreements with the owners of some units, especially those on the ground floor.
“We started out as a developer of the mall and ended up managing the mall via our subsidiary SpaceU8 Property Management Sdn Bhd.” With core businesses in property development and construction, Mainstay Holdings plans to have green features for all its projects, including rainwater harvesting and the usage of energy efficient materials.
The developer is planning to brand its commercial projects “Space” while “Mstay” would be used for its residential projects. Mstay Villa and Mstay Hill are the names of its first two residential developments, both gated and guarded, slated for launch in 3Q2012.
Mstay Villa, with a GDV of RM150 million, will comprise 40 luxury bungalows and 28 luxury condominiums on freehold, elevated land. The 11-acre tract, which was previously an orchard, is situated just outside the Putrajaya border. It is located five minutes from Alamanda mall in Putrajaya and the Kajang interchange, and just 10 minutes from Bangi. Nexus International School in Putrajaya is also minutes away.
“Our target buyers are professionals in their late 30s. They may have one or two kids, are doing well and looking to move up to the next level. Some people like to stay away from the hustle and bustle of the city and this is not too far away. “Essentially, Mstay Villa offers countryside living but in close proximity to urban city living,” Raja Azmi says. The earlier name proposed for this project was Dusun 41, but the developer changed it to Mstay Villa to have a common brand for its residential projects.
Raja Azmi says 2 and 3-storey bungalows will be built to take advantage of the terrain. Mstay Villa will comprise bungalows with built-ups of between 4,000 and 7,000 sq ft and land areas from 6,000 sq ft. The developer plans to price the six-bedroom units from RM2 million to RM4 million, depending on land size and built-up area. Meanwhile, the condominium units will have built-ups of 1,500 sq ft with indicative prices from RM400,000. Mstay Villa will come with a clubhouse and facilities, such as a swimming pool, gym, BBQ pit, function hall and convenience store.
“This is our first foray into residential or niche residential developments. We bought this land three years ago, while looking at many different types of land and possible development opportunities. We have been picky and chose niche residential developments because we prefer small developments as you tend to give more.
“As far as the general property market is concerned, I think the high-end market is doing okay and we are catering to those looking for upgrades,” Raja Azmi says. The developer plans to retain part of the orchard — about 20,000 or 30,000 sq ft. A natural stream meanders through the middle of the parcel, which is currently surrounded by oil palm estates.
Raja Azmi says Mstay Villa is one of the few freehold plots in the area. The bungalows will come with branded kitchen cabinets and built-ins, as well as a rainwater harvesting system. “It’ll practically be in move-in condition. Our buyers will be able to enjoy the serene and green environment with conveniences of the facilities offered and yet be close to amenities nearby,” he adds.
The second residential project to be launched is Mstay Hill, a JV project with landowner Sekatarakyat, the cooperative arm of Bank Rakyat Bhd. “We like to do this sort of JV with landowners, where we do not have to come up with any upfront money. They approached us to develop the 3.3-acre plot in Dengkil about two years ago.
“It is a nice, small niche development on elevated land. We will build 20 bungalows for people who want to move out from link houses to bungalows,” says Raja Azmi, adding that the company is targeting those living in the surrounding Sepang area.
Located just 20 minutes to KLIA, the Mstay Hill project has a GDV of RM25 million. The bungalows will have built-ups of 3,600 sq ft with land areas of between 6,000 and 12,000 sq ft. It is indicatively priced at RM1.2 million to RM1.5 million.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 921, July 30-Aug 5, 2012