For the past 5 years, our numbers of shopping mall has grown tremendously. From few old shopping mall like KK Plaza, Centre Point, Wisma Merdeka, Karamusing Complex and Wawasan Plaza, now we have additional of 2 that is newly completed and operating is Warisan Plaza, 1 Borneo and CityMall. And in the pipeline for completion is Suria Sabah, One Mall at Putatan and Mega Long at Donggongong. And another 2 proposed shopping mall under construction which is KK Times Square and Pacific Parade at Likas. Adding the completion and operating of all the above will make KK a shopping heaven to shoppers. But will they continue doing well?Who is their target market?
When I’m young I always follow my mum to shop. We are shopping from one store to another store under the sun. Today’s developer offer completely different product to us, now shopping mall has create more better shopping environment as its fully air condition. Whenever people entered, it will be whole day from morning till night. The shopping mall will provide everything under the sun. From groceries to department store for those who want to shop. Entertainment centre like movies, games centre and bowling for youngster who wish to spend their perfect weekend. And food lovers who can have variety of choices from fast food like KFC, Mc Donald, Kenny Roger and local foods, you name it, you will have it. It’s a one stop shopping centre.
“Now Everyone Can Fly” by Air Asia. I love to hear this. Air Asia has made a lot of people dream come true. Travel made easy when the cost is low. Travelers only need transport and not Nasi Lemak or Curry Chicken on board. Some other airlines only realize it after monopolize the industry for more than 30 years. Despite not making much profit, they also need sales their own building to learn the lesson. Sad to say, they are not well manage. With the geographical movement getting heavier with cheaper transport cost, Sabah is the one that benefit the most. KK International Airport is now second busiest airport in Malaysia receiving more than 4 Million visitors. The main city benefited is KK. That why our tourism is continue to do well as long as government do their part in promoting. As I always say to my friend from Sarawak, KK is growing city and plenty of gold reserve. We are surrounded by white sand island like Manukan, Gaya island and other which is facing South China Sea, back up by highest mountain in South East Asia and beautiful and well run 5 star resort like Sutera Harbor, Shangri la Tanjung Aru, Rasa Ria Resort and Nexus Resort. Of course West Malaysian coming to KK not for shopping but at least it does help in stimulating in their spending when they are here.
So which mall will continue to do well? Based on my observation, Centre Point will remain as one of the medium end shopping mall as it will continue to attract local and outsider due to their location and affordable shopping.
Wisma Merdeka also will maintain due to the location itself. Wisma is the main beneficiary from office crowd. Last year the management took proactive action to uplift of the mall with new moderm titles and opening of new outlook of their food court does help in maintaining their crowd. But overall their numbers of visitors has drop a lot due to strecth of the visitors.
Luckies mall in town is Karamunsing complex as it has been identified as IT centre in KK. As long as you want to buy electronics and computers product then this is the shopping that you can shop with. For the past 2 years, the owner has done a lot of renovation and uplift job to attract more visitors. I salute current owner for being so smart in bringing the dead place alive once more. It’s not an easy job.
Other shopping mall like CityMall will continue to enjoy good crowd from matured community as “one stop” family centre. The rest of the mall like KK Plaza and Wawasan Plaza will continue to face stiff competition and down trend in terms of number of visitors. If you notice Wawasan Plaza has converted their 3rd and above into hotel. So in stead of leaving it empty, hotel is one of the best and profitable business in town.
Last but not least, 1 Borneo Hyper mall the biggest mall in KK. Having say that, the mall still need a lot of effort, hard work and promotion to really stand firm within the next five years. To see the maturity of the place in terms of selling price, rental price and traffic flow really took extra miles from the current situation. With the current numbers of visitors to the mall especially weekend is not enough yet for the current owners and tenant to bear a good fruits. Week day crowd purely depend on hotel occupancy and some local visitors. Of course current owners of the 1 Borneo Tower A and Tower B which contain 800 units will expected to bring in some permanent crowd but it’s not happening yet.
If calculate base on number of visitors per square meter in the mall. You will notice that per square meter at 1 Borneo only contain less 1 person while matured place like Wisma Merdeka and Centre Point might have 3 persons or more. The best if I ever saw is Mid Valley and Sg Wang, per square meter will reach above 4. That why the management of 1 Borneo needs to put in extra effort and their recent success bringing in Parkson Retail is definitely help in boosting the numbers. And opening of as Tunes Hotel in 1 Borneo also does help in bringing more local and foreign tourism.
Mall investment is definite worth considering provided the place is well manage and promoted as they will command good price. Imaging in 1993 Wisma Merdeka ground floor was selling for RM1000 per square feet and commanding rental of RM 2300. Today same unit worth RM2800 per square feet and rental is about RM 6000. Add some mall investment into your portfolio as it’s a good cash flow givers. But bear in mind, if the mall is not well manage, the management fees its self will kill you. So invest wise and look the location as long term and see who is the man behind. Happy Investing
You cannot Grow Land.. CK Wong & KH Wong
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Hi Wong,
I really enjoy your article.
Really help people to accumulate their wealth through real estate investmen.
Hi Teoh,
Happy to hear that, please share your experience here also. So that we can learn from each other. Happy Investing
You cannot Grow Land.. CK Wong & KH Wong
Planning to pay Sabah a visit since start reading your blog few months ago. Your blog have bring up Sabah tourism too! End of the year would be a good time?
Hi,
Anytime is good. The natural attraction will be here 24 hours a day and 365 days a year. The benefit of Sabah is to continue selling what they have without initial COST. Happy Investing.
You cannot Grow Land.. CK Wong & KH Wong
Hi Wong,
Wanna ask your kind advice on this.
1. Can we withdraw EPF ACC2 to finance the 10% deposit of downpayment?
2. Say we pay the downpayment-10% in cash, then we withdraw EPF ACC2 to finance later. And after 3-5 years, we sell off the property. Is this allowable for property finance by EPF ACC2?
Thanks,
Regards,
Kelvin
hi Kelvin,
Yes. You can do that. After few years even if you sold your property you dont need to return the money back to EPF. You still can use your acc 2 to finance your downpayment on your second property but EPF will ask you to show them first S&P agreement. I’m doing this also. I trust my own investment skill more. Money is better at my own pocket rather than other people pocket. Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong
Interesting article but it would be better if add in some latest photos showing the happening around. i haven’t KK for quite sometime already. thanks
Hi Jimson,
Thank you. I will try to upgrade my blog in time to come. Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
thanks CK Wong for your article and insight, very thought provoking…
was also wondering the same question about EPF account 2, i was thinking it was only for first property and that is it… so it isn’t true i guess, thanks…
do you have any interesting website or books to read on EPF and income tax in real estate management? thanks…
Hi Lai,
Just visit EPF website as the information there is enough for you to understand all. About tax, dont worry too much unless you have too many property portfolio under management which generating alot of positive cashflow…so how many property you have now? Tax is good as bank love borrow to those who pay high income tax. Happy Investing.
You cannot Grow Land.. CK Wong & KH Wong
Hi Wong,
Thank you for your kind explaination.
Further to that question, say i purchase a house under my name and my girlfriend’s name, can i (only myself and not her) proceed to withdraw EPF ACC2 for the 10% deposit? For your information, bank financing will be also under 2 names.
I tried to go over the information from EPF website and only found that if both spouse wanted to withdraw cash frm EPF, they need to show some Proof of relationship such as a Nikah certificate / Marriage Certificate or children’s birth certificate (Assist Spouse Withdrawal Application).
Thanks,
:)
Appreciate your expertise and experience very much here.
Kelvin
Hi there,
I think you better comfirm with EPF. But I have one friend who purchase property with his cousin. He can withdraw from EPF.Furthermore the first withdrawal is payable under your own name. So i think should be OK. Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong
Thanks CK Wong for your information. actually i only have 1 property as i am very new in property, but am already eyeing my 2nd prperty, which is why i need to understand the tax portion. was thinking of paying as little as possible to income tax so the more sachflow i have will be use for my 2nd property…and so on..
mind sharing with us all why is paying more tax to our advantage? other than bank will be more willing to lend us more money, maybe up to 100% margin of finance? wow…that will be great…
Hi there,
I never know that by more paying tax will help in getting more loan? Bear in mind, bank want customer who is paying all his commitment “ON TIME”. One of my customer getting 36th property loan with us yet the loan still approved. Do you know why? That because all his commitments from Hire purchase, Credit cards and all property loans are paid “ON TIME”. So bank loans will not consider how much more tax you pay to borrow you more!! Mean while I never thought of getting 100% financing loans for my property. Some banks are giving such as Bank Islam and Bank Rakyat. So don’t over exited on idea that some US guru gives. We are learning and applying Malaysian Concept and NOT US CONCEPT. Happy Investing.
You cannot Grow Land.. CK Wong & KH Wong
There is an over supply of shopping malls in KK. Many has failed, yet many are still coming up.
Basically the malls in KK are of poor quality in both structure/ design/ management. When KK plaza came up, I was quite excited. Now it is a let down, so is Tg aru plaza. I am keeping my fingers crossed for KK times square and One Borneo. And the asia city mall… has nothing to offer. People still prefer centre point KK and Wisma merdeka.
Joe,
That why the concept and tenant list is very important. Of course you cannot compare KK Plaza with 1 Borneo. They are targeting different market. But coming future more and more mall expected to be constructed. Its part of the growing process turning KK into metropolitan town after KL, Penang, Kuching and Johor. Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
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What do you think of 1 borneo mall / shoplot for investment?
Hi,
over the long term if 1Borneo still can maintain their mall activities it will still Ok. But its not easy to maintain such a big mall especially when the crowd is not there. If you are financially strong and can stand negative cashflow of about 5 years..why not. If you really invest in, make sure take ground floor only as the chances of success is higher. Look at Centre point, it took them almost 20 years to really see appreciation at higher floor even though they are located at town centre. Furthermore if there is another developer developed 2Borneo at the size of current 1Borneo, I dont think you can get RM1500 per sf for ground floor. Happy Investing.
You cannot Grow Land.. CK Wong & KH Wong
It troubles me to see the luke-warm crowd that frequents the 1 borneo mall. Many locals themselves do not think of driving themselves up to sepanggar to go shopping- the reason being too out of the way and too far. Many just go for window shopping, if they passes by there. I hope the anchor tenants are able to draw the correct crowd in the near future.
5 years is a rather long time to be in negative cash flow. I see some shoplot owners are already letting go their units at affordable price.
I heard star city shoplot (under construction) are selling RM2,500 psf for ground floor . I think it is a bit overkill and overprice as they are known to be “good in selling but not good in managing”. See how disaster is Kompleks Asia City as most of my buyers are having “nose bleeding” every month as they have to service the bank loan on their untenanted shoplots. They are no takers for their 1st floor shoplot although it is renting at RM5 psq. Shop seems to come and go as their “triple L” is not there such as location,limited units and lasting feng shui.Even the anchor tenant , Milimewa has not decided whether to move in or not in view of the uncertain scenario. They have only certain dead end shoplots available for sale as the prime location shoplots are only for renting only. Only time will tell how successful are they in managing the Star City . Watch out for the next new shopping centre to be opened next year….Megalong.
HI,
I saw that pricing at Daily Express today which suprise me alot. Wonder how they can fetch that price.The main winner of property within Centre Point,Sinsuran, Kompleks Asia City, Future start city and Asia City is “API-API Apartment”. That why I call this AAA properties. Rental is very steady and capital appreciation continue to hit all time high. Mall opening is expected to be very very challenging especially for Megalong. Another few mall expected to commence constructions is KK Times Square & KK Mega Mall. So wait and see. Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
Oh, I heard another mall is in the planning stage. Can you believe it? Its located around the istana area and called artkinson something. Well , we are in for a good time to see all this substandard/ suboccupied malls fighting one another.
on a separate note, I was driving back into the city from 1borneo yesterday at 6pm and saw the crowd of cars leaving the city after work. Traffic jams. The population in Likas, inanam, sepanggar had definitely increased. This is the population that will eventually crowd 1borneo.
HI,
I heard about this project, it located next to Balai Police at Jln Dewan/Padang Merdeka. They are selling above my expectation. Let them build and bring up KK property market into higher standard. As I always say, if you have property portfolio in hand you are joyful when you found out more and more development nearby your properties. But it will be nightmare if you don’t have anything in hand except cash. Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
A new mall near balai polis? Any building space as it is near the hilly Atkinson Clock Tower ? Or is it at the former LBBP building?Nowadays, KK mall owners are smart as they don’t sell but rent out the units just like Suria Sabah as they know their assets will sky rocket in times to come. Another criteria to have a successful mall is the cineplex, bowling centre and plenty of promotion must exist!!!They should built more suburban mall like City Mall as I noticed last night ,that place is crowded with medium to high income group. Have you heard about the new 1borneo or rather 2borneo is in the proposal stage near Karambunai area?
Hi,
Its former LPPB building.I have no idea how big the whole area is but they are started selling already.Not cheap. Never heard anything on 2Borneo then…hope more to come..Its good for overall property market in KK. Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
Why would anyone want to rent a shoplot in a shopping mall to do business? Any shoplot outside, in a good location can also do the same business. Any comments?
Joe,
You must be aware that the shopping habits have been change especially for developing country like Msia. We are looking are 1 stop shopping mall means you go for breakfast, lunch, dinner and supper within one roof within same day. The shopping from one shoplot to another shoplot is no longer a trend. Do you want to walk shoplot to shoplot under the hot sun for shopping? Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
Most of my buyers are rushing to sell their properties before end of this month so as to avoid the 5% RPGT. Until today,there is no clear indication on how this tax is calculated? i heard the Suria Sabah is selling at RM2,500 psq for shoplots at 3rd floor? Even CPS are selling at RM3k psf for the ground floor.
HI,
Property is long term investment. If because of 5% tax you decided to sell then I dont really know what to say already. Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
RGPT 5% is the tax from the gain you obtained after a sale, right?
If you make a profit of 100k from the sale of your 500k property, your tax is only 5% of 100k, right?
HI,
Assumption:
Purchase at RM500K
Sold for RM1M
You profit is RM500*5%
That is only RM25K.
Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
5% RPGT is a lot of money. Imagine , you bought a property at RM500K in 1990 and now, 2010 ,you wish to sell it at RM2 million . IRD will tax you on the your gain of RM1.5 million which is a whopping RM75,000 regardless when did you buy it. So ,think twice if you wish to sell your properties next year
Hi,
Its part of the rules. So are you deciding not to buy property anymore?We need to adapt ourself into this new tax system. At all time property is still the better choice to fight against inflation. Do you have better option? In order to avoid all this, you better design a portfolio of properties so that you will not be badly affect when new tax system come. Happy Investing.
You cannot Grow Land..CK Wong & KH Wong
Hi
You mentioned that Megalong will face challenges. Can you please elaborate on the challenges and what may go wrong ? Was told by a broker that all 400+ units of shoplots have been sold and prices have gone up at least 4 times since launching. They provide at least 1000 odd car park and it’s the only mall centrally located in Dongonggon. The consolation i heard was Giant Supermarket will be opening in Jan next year. In your opinion, what would be the key factors for the mall to be another successful citymall ?
Hi,
The successful shopping mall must be surrounded by “purchasing power” consumer. If not who going to purchase it. Bear in mind, 1st floor & 2nd Floor of City Mall also not enjoying good crowd even until today. Only the ground will normally enjoying the full crowd. Mrs Ong, which agent told you that its fully sold?Last few week I still got one client approach me for financing and they decided not to buy after I mention few things to them. And which agent told you it has been rising 4times? That means if you bought it for RM1000 now you can sell for RM4000K?? Wisma Merdeka with their best location in town lately has been transacted at the highest price after more than 20 years. If what you say is true, that means Wisma Merdeka has failed many years ago. Giant supermarket is everywhere now. Its Nothing special..Do you aware that Giant is not selling cheap price for our consumer items? I’m not saying MegaLong is not good at all. Think Twice.. Happy Investing.
You cannot Grow Land..CK Wong & My Dad
Hi, would like to hear your views on the potential of Suria Sabah? What is the occupancy rate at the moment? Eventually, do you think it will be the centre of crowd attraction in KK (competing to the other malls in town), especially with GSC opening there? Does the controlled tenancy policy works to the advantage of retailers? Thanks.
HI,
The management are very strict in their tenant selection which is good but over the long term it will affect the whole mall operation. If you notice the mall is still lack of customer since it was lauching last year Oct. The high rental expected by management has scare away alot of retailer and even with the moving of GSC it will not help much. Happy Investing
You cannot Grow Land..CK Wong & MY DAD
i guess Suria Sabah is for Branding awareness purposes rather than really making revenue…expecially for Franchise business…
Anyone agree?
HI,
They try to be prestige but dont forget there is high price that they need to pay. I think the developer forgot that Sabah is not ready for such market. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
hi..CK
The developer can wait for market to mature as they are politically & financially sound..and SuriaSabah is sit at the most “Ideal” location along city coastal…my opinion..
location, location & location
BTW..recent comment list to be display “longer” as people start to pouring opinion..
I just want to share some of the cases why there are shopping mall failed in JB which we don’t want to see in KK.
1) Tenant Selection. For example, choices of products. There used to be one shopping mall all tenants are selling handphones accessories. Good Luck.
2) Population. The population in sabah is approx. 4millions, which is ONLY half the size of Jakarta. Can the shopping malls in KK handle such SMALL volumn of humans?
3) Budget airlines agian. People use to joke if i want buy luxury items. Do i go to KK to buy? People will travel to HK or KL or Singapore.
3) Dispute between tenants and management.
4) Developers faced financial problems.
KK MegaMall, Likas to start mobilise…according to some source from the “Buyer commitee”..1st of May 2010 will commence work..
anyone got other news? Pls enlighten us..
HI,
Hope so..My group bought alot of unit there. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
hi, CK
i reckon u should be in the “buyer commitee” to uphold ur groups interest!!
Regarding the KK megamall Likas project, according to the staff, it MIGHT start in July 2010, guest all the buyers are waiting quite anxiously.
Mr. CK Wong, would u mind to share what type of unit u have bought, around how many sq. ft? my relative is considering to get a shop lot there, but he is still quite indecisive due to the prolong abondon years and other risk factors.
Hopefully the project will work out soon and bring more lively to the Likas neighbourhood.
Where is KK mega mall?
Another mall to add to the already saturated market?
Hi,
I dont think Mall market is saturating. Yesterday I when to 1Bornoe, the crowrd is full..I’m trying to buy movie ticket..and I think the queue is more than 100 ppl waiting. KK MegaMall is now known as Pacific Parade..should be in the market within the next 6 month. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
Hi,
What is the current market price for shop lot ground floor in Asia City (Phase 1), do you think RM500/psf is it too much and for the rental RM3.00/psf is reasonable?
AG
HI,
There is nothing wrong with this location. Just that the management has fail to bring up such fantastic location. They are not proactive and creative enough to run the whole area. So no matter how cheap it is, I still foresee some risk. The only positive thing about this area is few hotels are construction which will improve the crowd few years from now. So you have to wait…Happy Investing.
Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
Hi. Newbies here. I have always been interested in empty land as investment but know absolutely nothing about malls so this is a very refreshing site indeed.
Recently, some friend was talking about the One Place Mall at Putatan. Any one care to give me more insight into this one? What’s the going price? What are your prediction on it’s viability as an investment? In fact, I would very much to hear just about anything from you people.
Thanks.
HI,
This area has turn up faster then what I expected. The crowd has improve tremendously for the past 2 years. I expect this mall to do well but please take ONLY THE GROUND. As in shopping mall investment the highest rate of success is only on the ground. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
i.c. Thanks. Now I am not familiar with pricing or what sort of pricing we are talking about. So assuming we are talking about ground floor, how does the mathematics adds up? For example, what’s the cost per sq.ft? rental per sq.ft? How % loan and at what sort of rates etc. Can you give me some figures for me to do some calculation?
Much appreciated.
HI,
Try find out more on this as I’m not familiar with the area rental and pricing since I’m not interested on that place. Happy Investing.
You cannot Grow Land..CK Wong & MYDAD
What is your opinion about the bumi lot for the condo investment purpose. Should we take the advantage of the 5% discount for the bumi lot or it is not recommended because the bumi lot may have difficulty to sell in the future as compare to the non bumi lot.
AG
Hi,
The rich of the people in town is not “BUMI”. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
Lots of bumis get rich after they sell their land. My neighbour sold his kepayan land for 1.5 million. First thing he did was buy himself a brand new luxury car. It has been three years now, and i think he is broke again. LOL.
HI,
To be rich you need strong habituals..easy come easy goes..”principles in life never changes. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
Hi,
In general most people though not all, perceived rich people as stingy. I rather use the word frugal. It’s becuase of that frugal lifestyle that make them so rich in the first place . Most of them are great philanthropists .
It’s the attitude towards money that devide the two. It’s not surprising why lottery when broke after a few years.
Azlan