KUALA LUMPUR (Jan 16): Integrated property developer Kepong Industrial Park Group better known as KIP Group will be adding another five hybrid community-centric retail centres under the KiP brand in Selangor, Negeri Sembilan, Pahang and Kedah over the next three to five years.
KIP Group director Valerie Ong told TheEdgeProperty.com that these new centres are KiP Mall Kota Warisan in Sepang, KiP Mart Sungai Buloh, KiP Mart Kuantan in Pahang, KiP Mart Sendayan in Negeri Sembilan and KiP Mart Sungai Petani in Kedah.
“The KiP brand retail properties are located at the door steps of major hubs. We always look for local traders to offer their goods and services to the local community,” she added.
KiP Mall Kota Warisan is now 90% completed and pending approval from the authorities. The mall will be open for tenant renovation in the second quarter of this year.
KiP Mall Kota Warisan has a gross lettable area of 270,033 sq ft and a net lettable area of 178,884 sq ft. It is the first KiP brand retail property in Selangor.
“It [KiP Mall] is also one of the components of the 36-acre KIP Sentral development which comprises Core Soho Suites, shoplots and the proposed KIP Hotel,” she added.
After KiP Mall Kota Warisan, the company will start the development of KiP Mart in Sungai Buloh and Sendayan.
According to Ong, the KiP brand retail centres offer a different shopping experience. KiP Mart is a hybrid between a traditional wet market and a conventional shopping centre.
KiP Mart comprises five components which are a fresh market (wet market), a supermarket, retail shops, F&B outlets and a car showroom. It aims to attract mass consumers to visit, not only for their daily necessities but also for their shopping leisure.
In every KiP Mart, the management has allocated 30% of the space for a fresh market which allows vendors to offer their fresh produce to consumers.
Meanwhile, KiP Mall is a neighbourhood mall catering to the needs of low- to middle-income customers.
Ong said as both KiP Mart and KiP Mall are targeting the mass market, mainly low-medium and middle-income earners, its business model is more resilient compared to conventional retail operators.
“KiP Mart and KiP Mall can draw crowds even during bad times, as most consumers turn to buying cheaper daily necessities from fresh markets instead of malls,” she explained.
There are currently KiP Marts in Tampoi, Kota Tinggi and Masai in Johor Bahru; Senawang, Negeri Sembilan; and Melaka; as well as one KiP Mall in Bangi.
“All these six properties have been chosen to be injected into a real estate investment trust (REIT) as they have enjoyed high average occupancy rate of over 85% in 2016,” said Ong.
In terms of rental growth, their annual rental increment has ranged between 3% and 5% even during the current sluggish market conditions. The REIT is slated to be listed on the Main Market of Bursa Malaysia on Feb 6. The initial public offering of KIP REIT is expected to raise RM234.15 million for the acquisition of the six retail assets and to acquire land in prime areas for future developments.