IOI Properties loves malls a lot. RM680 million is proof.

IOI Properties loves malls a lot. RM680 million is proof.

RM680 million is not a small sum of money. Not many companies could afford it. What’s the reason why a property developer is willing to pay a big amount to another property developer and buys their mall? What’s the longer term benefits? Really depends on the strategy which the developers are pursuing yeah. Let’s look at the latest acquisition news of a mall I frequent every other month; Tropicana Gardens Mall. The buyer is IOI Properties Group Bhd.

Article in thestar.com.my IOI Properties Group Bhd is acquiring Tropicana Gardens Mall in Petaling Jaya for RM680 million.

The seven-storey Tropicana Gardens Mall has a total gross floor area of 2.95 million square feet and a net lettable area (NLA) of 1.05 million square feet with an occupancy rate of 77 per cent. 

The mall is connected directly to Surian MRT station and it is accessible via four major highways. 

The acquisition will expand IOI Properties’ mall operations within the Klang Valley region, complementing its two existing malls in the area namely IOI Mall Puchong and IOI City Mall, Putrajaya, currently the largest mall in the country at 2.5 million square feet NLA. 

The other two malls listed in its property investment segment are IOI Mall Kulai at 264,000 NLA and IOI Mall Xiamen, China at 639,000 NLA. Do read here for the full article: Article in thestar.com.my

Retail industry presence could be an aim

Many continue to tell me that malls will not do well and I always tell them to go to the malls which are doing well so that they have another opinion versus always going to the wrong malls which are not doing well and then concluding that there are too many malls. Think about it yeah.

Also, the visitors to mall is not based on average shopper numbers yeah. A small number of established malls would be taking the lion’s share of all the shopper numbers. Meanwhile the few struggling malls will struggle to get a piece of the shopper cake.

By the way, owning more malls can also mean that the mall’s loyalty card is going to be more popular versus just one mall yeah. There are definitely economies of scale when one is in control of several big malls versus a small mall or even just one big mall.

Funds for expansion of development into Johor, maybe?

I have no idea how Tropicana plans to use the money from this sale but recently, they were featured in many articles for this:

What is certain is that the retail scene continues growing

Expansion…Sunway.

Growth in retail sales predicted

Happy shopping everyone. Of course, can also take a look at the two mega townships in Johor too.

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