Another case of buyers ‘losing’ money in their investments. This happened in Kota Kinabalu but could have happened anywhere in Peninsular Malaysia. A developer who developed and managed a mall did not pay the rentals to the buyers who bought the units on a leaseback basis. The mall is Oceanus, located in a good location along the scenic waterfront in Kota Kinabalu. Remember, there are an estimated number of over 190 malls within Greater Kuala Lumpur alone by 2021 As per reported in propertyhunter.com.my there are more than 230 purchasers of Kota Kinabalu who are owed rentals amounting up to RM38 million as well as future guaranteed rentals. This group of buyers have engaged a team of lawyers to represent them for the recovery of the outstanding.
According to the article, Sunsea Development is the developer of the Kota Kinabalu Waterfront Project, comprising of Phase 1; Oceanus Mall, the Marriot Hotel and Pelagos Designer Suites and Phase 2; UNCHR Market – which is yet to be launched – in a joint venture with DBKK Holdings Sdn Bhd, who is the owner of the land. The commercial units in Oceanus Mall were sold on a leaseback basis wherein Sunsea Pavilion Sdn Bhd entered into tenancy agreements with the purchasers. To date, the developer owes purchasers a staggering RM38,787,344.74 in unpaid rental as of 31 December 2017. The buyers call themselves the Oceanus 5.0 and is represented by Datuk CK Tan. The group’s objective is to reach out to political leaders to find solutions to the issue, including the recovery of investors’ money and future rentals.
Tan shared the facts of the case. “In 2016 we met with Datuk Mayor and briefed him on the late rental payment. We emphasised that Phase 2 of the Project (UNCHR Market) should not be assigned or even commence without settling all the outstanding rental payment for Phase 1 purchasers.” However sometime late in 2017 or early 2018, the group believed that DBKK gave its consent to Sunsea Development to assign Phase 2 of the development to one Sunsea Development (Sinsuran) Sdn Bhd, a company of which Sunsea Development Sdn Bhd is a shareholder. It was also learned that soon after the assignment of Phase 2, Sunsea Development Sdn Bhd was wound up by the High Court of Malaysia in Kuala Lumpur. According to Property Hunter, Sunsea Development Sdn Bhd was unreachable to comment at the time while the management of Oceanus was also unavailable at the time of reporting. Property Hunter will continue to make contact and keep you up to date on this matter as it develops. Please refer to the full article here.
It’s important to understand that regardless of the location, the management of the mall is extremely important. There are many good names in mall management. It is also important that the local authorities play a more pro-active part because if they did not, then it’s much easier for developers to shirk from their responsibilities. As for buyers, it’s important for all of us to understand what we are buying. A mall must be extremely popular for the retail lots to be earning lots of money and the cycle should be okay. In this case, the location is the main attraction. I have been there just two months ago and the view is nice. In the future though, there is no guarantee that the mall would continue to be popular if there are too many malls being opened in the vicinity yeah. It’s always a risk that everyone needs to be aware of. Happy following this news report by Property Hunter.
written on 19 May 2018
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