Quill City Mall lines up new tenants, sees brighter days ahead

TheEdge Mon, Dec 09, 2019 10:16am - 4 years View Original


KUALA LUMPUR: Quill City Mall, the retail arm of the Quill Group of Companies that was hit by the challenging retail environment in 2018 and most of 2019, is positive that things will start to improve beginning this month.

The optimism stems from a list of new tenants it has lined up, which it is confident will help boost the mall’s occupancy, footfall and, as a result, its revenue. The mall is also being repositioned with an edutainment focus.

Quill City Mall, like many other retailers, has had it tough for the past few years. In December last year, the mall saw its occupancy rate fall to 47.1% when Aeon Co (M) Bhd vacated a huge portion of the mall, while Asia Music City Sdn Bhd exited altogether.

Nevertheless, recently appointed group chief executive officer (CEO) Koong Wai Seng said plans are afoot to turn the mall around. The mall, which has a net lettable area (NLA) of 777,967 sq ft, opened its doors five years ago.

“Our game plan has changed. It is about the experience,” Koong told The Edge Financial Daily. And from 47.1% a year ago, the mall managed to raise its occupancy to 60% in August. Between now and June next year, several new tenants will move in and take up another 247,000 sq ft in NLA. This will lift its tenancy to 78%.

For a start, JDX Presto Concept Store will open its doors on Thursday. It will take up 50,000 sq ft in NLA and help push occupancy to 65%. JD.com, China’s leading one-stop e-commerce platform — has teamed up with Presto, a home-grown social marketing application with an e-wallet function and convenience feature to bring the largest online-to-offline experience store in the country. The store will be 10 times larger than the Taobao store that recently opened in MyTown KL. It will also feature TikTok live streaming by influencers. Koong said that the store will provide entertainment, education and an experiential learning environment.

The store will not just be an avenue to enable consumers to touch and feel an item prior to purchasing it, but it will also be a platform for local entrepreneurs to showcase their products and reach out to a wider audience.

And when March comes, a new e-sport tenant will take up 20,000 sq ft in NLA. This tenant will have an e-sport academy. By April, a health spa is expected to take up 100,000 sq ft in NLA. Then, by June, Universiti Kuala Lumpur (UniKL), which has a campus just next door, will move its Shah Alam campus into the mall that will occupy 77,000 sq ft of space.

“Edutainment is the right fit for the mall since UniKL will come into the boundaries of the mall,” says Koong, adding UniKL’s move will add 3,500 students to the area. This is in addition to the 3,000 students already at the campus next door.

With these new tenants lined-up, Koong said the mall is “definitely not closing.” In fact, he expects Quill Retail Malls Sdn Bhd (QRMSB) to return to the black in financial year 2021.

“We have to be realistic,” said Koong, who is experienced in retail and property. He was previously the chief financial officer of Sunway Group, and an executive director at Tropicana Corp Bhd. His most recent stint was the CEO of Sunsuria Bhd.

Quill City Mall forms part of the Quill City integrated development being developed by QRMSB. For the financial year ended Dec 31, 2018, QRMSB recorded a net loss of RM31.16 million versus a net profit of RM66.98 million for the previous year, while revenue fell 21.5% to RM29.5 million from RM37.57 million. As at Dec 31, 2018, QRMSB had an accumulated loss of RM34.96 million. It also had total liabilities of RM697.28 million, of which RM52 million are current.

Previously known as Vision City, the Quill City development was originally undertaken by RHB Daewoo Sdn Bhd and subsequently abandoned. In 2007, Quill Group bought the asset for RM430 million.

The development, which sits on a 7.1-acre (2.87ha) site, will also have residences and an office block. According to Koong, the Quill Group plans to market the residences in Hong Kong as the Hong Kong buyer market is currently hot.

“We expect a handsome profit from the sales,” he said, adding that going forward, QRMSB should be able to comfortably cover any financial obligations.

QRMSB has an outstanding of RM200 million Class A, RM60 million Class B, RM20 million Class C and RM10 million Class D sukuk under its RM350 million Sukuk Murabahah (2017/2024) facility. The issues were part of QRMSB’s plan to partly refinance the outstanding RM420 million medium-term note issued under its RM850 million bond facility established in 2013 to fund the mall’s development.

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