MALAYSIA: Kuok Group buys back the Johor Bahru City Square (JBCS) mall after it was sold 20 years ago to Singapore’s sovereign wealth fund.
The Singapore-based company controlled by Robert Kuok, Malaysia’s wealthiest individual, Allgreen Properties Ltd, has repurchased the majority stake in JBCS mall from GIC Real Estate Pte Ltd, an arm of the Singaporean sovereign wealth fund. Sources familiar with the deal estimate its worth at RM850 million, The Edge Malaysia reports.
This transaction involves Allgreen regaining a 70% share in JBCS, which it originally sold to GIC RE two decades ago. The acquisition was finalised about eight weeks ago, with Allgreen now holding a 76% stake in the mall through two of its subsidiary companies. This marks the return of Kuok Group as a major shareholder of JBCS.
GIC RE initially acquired JBCS in 2004 from Kuok Brothers, Pelangi Group (also linked to Kuok Brothers), the Johor Bahru City Council, and Lee Brothers, reportedly for close to RM500 million.
This purchase is notable due to the ongoing anticipation surrounding the Johor Bahru-Singapore Rapid Transit System (RTS), with a station planned just 500 metres from JBCS, set to commence operations by January 1, 2027.
Sources suggest that Allgreen’s venture into Malaysia marks the beginning of its investment plans in the country’s retail sector. However, as of writing, Allgreen has not responded to inquiries regarding the acquisition.
JBCS is already featured on Allgreen’s list of retail assets, boasting a prime location minutes away from the customs and immigration checkpoint.
The six-storey mall offers over 1,250 parking bays and hosts over 200 retailers, including popular brands like H&M and Uniqlo, with an occupancy rate exceeding 85%, barring the pandemic period.
Allgreen may potentially explore investments in other malls in the future, according to sources.
Future plans may involve asset enhancement initiatives (AEI) for JBCS to enhance its appeal and adapt to evolving consumer preferences.
The mall is owned by Johdaya Karya Sdn Bhd, with Aldertree Properties Sdn Bhd holding a 70% stake and Merit Properties Sdn Bhd holding the remaining 30%. Notably, Aldertree is predominantly owned by Allgreen Properties (Malaysia) Pte Ltd and Kuok Brothers Sdn Bhd.
Johdaya’s directors include Ng Mui Kit, Tan Siew Min, Yap Mei Leng, Tho Leong Chye, and Datuk Mohd Noorazman Osman, the mayor of Johor Bahru. Majlis Bandaraya Johor Bahru owns a 15% stake in the mall. Merit Properties holds the stake, with MBJB having 50% of the stake.
In the financial year ending March 31, 2023, Johdaya reported revenue of RM39.46 million and a net profit of RM43.33 million, with total assets amounting to RM1.03 billion and total liabilities of RM120.13 million. Also, it collected profits amounting to RM 747.08 million.
Industry experts foresee promising growth prospects for JBCS, particularly with the anticipated increase in foot traffic post-pandemic and its strategic location vis-à-vis the RTS and customs checkpoint.
Samuel Tan, executive director of KGV International Property Consultants, said, “The entry of key tenants draws in new crowds. A relook of the mall is necessary to cater for this new landscape.”
Adzman Shah Mohd Ariffin, CEO and chief real estate consultant at ExaStrata Solutions Sdn Bhd, views the acquisition as a testament to JB city centre’s burgeoning status as a cross-border retail hub.
“The purchase of JB City Square mall by Kuok Brothers was indeed a surprising move but it goes to show that the JB city centre is poised for prominence as a cross-border retail destination in view of its proximity to the CIQ and linkage to the RTS, which will provide high-speed travel between JB and Singapore,” he said.
Established in the 1980s under Kuok (Singapore) Ltd, Allgreen has a rich history in property development. Its retail investment portfolio includes Singaporean assets like Great World and Tanglin Mall, with Pasir Ris Mall scheduled to open soon. Earlier this year, Allgreen acquired Seletar Mall for US$412 million. /TISG
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