KOTA KINABALU, Sabah’s capital that celebrated its 10th anniversary as a city in February, is slowly but steadily becoming a shopper’s paradise on Borneo Island. Despite massive growth in retail and shopping sector of property development in the state, however, values for such properties are still holding up.
The completion towards the end of 2009 of Suria Sabah shopping complex downtown, within the Central Business District, had spurred concerns in the property development circle that the capital city of Sabah might suffer from a saturated retail market.
Notwithstanding such concerns, the 2010 Kota Kinabalu Property Market Report issued by CH Williams Talhar & Wong says, “Values are holding up with established retail malls and those with differentiated offerings still maintaining good pedestrian flow.”
Suria Sabah, the new entry with a net area of about 700,000 sq ft of retail space, made its partial opening for business just in time for the year-end holiday and Christmas season.
The retail space at the complex is mainly owned by Makamegah Sdn Bhd, the developer of the property, and Metrojaya departmental store is the anchor tenant occupying a massive area of 125,000 sq ft.
The report states, however, that the occupancy for this mall “has yet to pick-up, although we are given to understand that occupancy for it is expected to increase” this year.
CH Williams Talhar & Wong is of the view that aside from location and accessibility, design and layout, other ‘intangible factors’ play significant roles in the success and sustainability of a retail complex.
Marketing and Promotion
These factors include concerted mall management, namely in marketing and promotion, a varied trade mix as well as good tenant retention, the property market report says.
The opening of Suria Sabah has come closely after the completion in June 2008 of 1Borneo Hypermall that has 1.26 million sq ft of retail space, although it is located at Menggatal, 7km from downtown KK.
The 1Borneo’s Hypermall is presently the biggest shopping mall in Borneo. Its retail space is about three times the size of KK’s Centrepoint shopping centre.
It has over 600 retail lots and dual-frontage shoplexes. Its developer, Sagajuta (Sabah) Sdn Bhd has taken on an aggressive marketing drive.
There are also several neighbourhood malls scheduled for completion within this year. These include the Megalong (156,000 sq ft) in Donggongon and the One Place Mall (86,000 sq ft) at Putatan.
Competitive Retail Environment
The CH Williams report says “a more competitive retail environment” is in store beyond 2011-2012, when bigger retail complexes are in the pipeline.
Coming on-stream and according to development schedule are: Kompleks Star City, The Waterfront Mall at KK City Waterfront and The Mall at KK Times Square at Sembulan.
On “purpose-built office space” sector of the property market, the report states that it has little or no changes in recent years.
It says that since the new Federal Complex some three years ago, there has been no new supply of purpose-built office space.
“This is due to weak demand and increased supply of alternative office space from upper floors of shop-office developments.”
The report also notes that with improved regional economic conditions and announcement of ‘generous government spending plans’, the overall outlook for the Kota Kinabalu property sector for 2010 appears to be encouraging.
Buyers from East Coast Towns
“Property developments in the State Capital would remain an attractive investment option for buyers from the East Coast towns of Sabah where choices of new developments are limited,” the report adds.
CH Williams Talhar & Wong has branches in many parts of Borneo, including Kota Kinabalu, Sandakan, Tawau, Lahad Datu, Keningau, Federal Territory of Labuan, Kuching, Sibu, Miri, Bintulu as well as at Bandar Seri Begawan in the Sultanate of Brunei.
Its scope of services is primarily in real estate valuation and consultancy. It also handles plant, machinery and chattel valuation, estate agency and project marketing.
Another area of service is in market study and research. It also conducts auction of properties.