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Kha Seng in mixed development

Posted on 22 July 2013 - 05:36am

Ee Ann Nee
[email protected]

KUALA LUMPUR (July 22, 2013): Kha Seng Corp Sdn Bhd, operator of the popular Central Market and the Kenanga Wholesale City (KWC) here, plans to undertake a mixed-use development on a site next to the Amoda building on Jalan Imbi.

Its CEO Aaron Soo (pix) said Kha Seng, known for its niche retail property development, had acquired the parcel of land at the junction of Jalan Bukit Bintang and Jalan Imbi, which it wants to turn it into a development of a hotel, retail space, apartments and small office/home office.

"We're still deliberating how much space to allocate for the respective components... but we hope to complete the project by 2016," he told SunBiz in an interview.

The group expects its revenue to grow 20% for the current financial year ending Dec 31, 2013 from RM102 million last year, mainly contributed by the opening of its Vivatel Kuala Lumpur hotel on Jalan Loke Yew here as well as KWC Fashion Mall's increased occupancy.

Vivatel Kuala Lumpur, which opened on Dec 15, 2012, is a 302-room four-storey hotel. It is the group's fourth development and its first foray into the hospitality industry. It saw an 88% occupancy in June.

Kha Seng also owns and operates the Viva Home Shopping Mall, which is located next to Vivatel Kuala Lumpur.

Soo, who was appointed to his current position in April this year, said the group has also allocated a capital expenditure (capex) of RM50 million for 2013 to upgrade existing malls, which will be financed by internal funds.

Part of the capex will be spent on expansion of KWC Fashion Mall, that has today hit an 87% occupancy rate.

"KWC2 (Phase 2 of the KWC Fashion Mall) is in the pipeline. We've acquired the (extra) land and we're now in the midst of fine-tuning the fit-out, number of lots, lot sizes and car park. We haven't submitted the development order, but it'll be adjoining to KWC Fashion Mall.

"We'll probably launch KWC2 by 2014," said Soo.

KWC Fashion Mall, opened since May 26, 2012, currently houses over 800 retail lots.
Soo said the group will add elements of high-end food and beverage (F&B) outlets like Tony Romas and TGIF to bring the mall one notch higher.

In KWC, the group has also set up a purpose-built concert hall and has started its first show on June 29, 2013.

"There's no concert hall in Kuala Lumpur and the best we can get is Stadium Putra Bukit Jalil, which is actually a sports stadium. We saw an opportunity (to locate a concert hall) on the 15th floor of KWC, which was originally built as a warehouse.

"The utilisation rate has been low and (we have realised) a warehouse was not the most practical setup and that it was perfect for a concert hall," said Soo.

With a seating capacity of 6,600 to 6,700, the concert hall can fill up to 10,000 people standing.

The group also plans to give a face-lift to the Viva Home Shopping Mall, originally planned as a one-stop furniture mall, to incorporate more lifestyle and entertainment outlets.

"In mall management, the key indicator is traffic flow or footfall. Footfalls (for Viva Home) weren't quite good so we're now in the midst of a rebranding exercise," said Soo.

There are now five floors in Viva Home and the management wants to bring in more fashion and lifestyle tenants and repositioned the mall from just being a furniture mall.

"We want it to be more of a neighbourhood or suburban mall where shoppers can get a variety of everything. We have a few F&B operators now, but we may be looking into pubs or night entertainment joints to tweak it to become a more lifestyle and entertainment mall," he added.

Meanwhile, Kha Seng will embark on the construction of a second wholesale mall on Jalan Haji Taib here by the end of this year, which will take one-and-a-half years to complete.

Dubbed Plaza Haji Taib, the group is in the midst of submitting its building plans for approval.

The proposed one-stop wholesale centre will feature a 10-storey building comprising seven levels of retail lots and two levels of small office/flexible office units and will offer a variety of trade offerings under one roof.

It will cater to businesses of all sizes, with units ranging from 97 sq ft to 363 sq ft.

"The trade mix of Plaza Haji Taib will be slightly different from KWC, which is more garments and fabrics-centric. The Jalan Haji Taib area is more of watches, accessories, spectacles, bags and shoes," said Soo.

Soo also said the group has no plans to venture beyond Kuala Lumpur or overseas for now due to limited resources. Neither is it ready to venture into real estate investment trust, nor list the group yet.

"When the opportunity comes eventually, the group will take a look at it.

"(But) we're still interested to acquire malls, using our synergy and expertise in mall management to acquire malls that make sense, should there be good opportunity," he said, citing Viva Home and Central Market as acquired malls.

Soo brings 30 years of experience in the hospitality industry, He was formerly the CEO of Sunway Lagoon Sdn Bhd.

The 51-year-old describes his management style as objective-driven and task-oriented. "My role is to tighten process, standardise and introduce some of the industry's best practices (to the Kha Seng Group)."
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