Vibrant property scene to transform East Malaysian landscape

1Borneo taking the shopping experience to greater heights

Touted as the first and largest lifestyle hypermall in East Malaysia mega mixed-development project 1Borneo is an impressive sight spanning across 23.3 acres of prime land in Kota Kinabalu (Sabah) with a gross development value (GDV) of RM1.2 billion.

CROWD PULLER: Chan says the sheer size stimulates people’s minds and attracts them to take a look.

A joint venture development between Warisan Harta Sabah Sdn Bhd and Sagajuta (Sabah) Sdn Bhd (Sagajuta) with United Sabah Islamic Association (USIA) as land owner, this striking mammoth is strategically located along Jalan Sulaman Highway surrounded by lush greenery overlooking the majestic Mount Kinabalu and the Crocker Range.

Its largest component is a shopping podium with an impressive gross area of 1.5 million square feet (sq ft). The 4.8 million sq ft of the overall integrated development comprises international and regional chain hotels, condominiums, auto city, oceanarium and discovery centre, handicraft and cultural centre, spa and fitness centre, amusement centre, bowling centre, cineplex and gourmet land.

The project also prioritised the minimisation of impact on the environment by investing approximately RM42 million for a TRANE Thermal Energy Storage System.

BRAND LURE: 1Borneo houses top brands to offer a wide range of products for shoppers.

Sagajuta managing director and chief executive officer Datuk Raymond Chan said size was important in the development. “You have to make it large so as to stimulate people’s imaginations. The sheer size becomes a pull factor and in the end, it amounted to 1.5 million sq ft.”

“We were able to lure in many of the big brands like Esprit, Quicksilver, Roxy and Levis to make sure we have a good range of components in it to make it work. Till date, the mall is 96 or 97 per cent tenanted,” he added.

The mixed-development had about 1,000 residential units and four hotels anchoring it — Novotel (263 rooms), Grand Borneo Hotel (338 rooms), Tune Hotel and Courtyard Hotel. “We are planning to build 1Borneo Sea World which will be about 30,000 sq ft to support the growing population,” Chan enthused.

When asked if there were future plans to replicate the development elsewhere in the region, Chan pointed out that it could be done for some suburban areas, but not so much for urban malls because they require extensive studies before the whole development begins.

He further revealed that this type of shopping mall needed a local population of not less than 1.5 million. “Asian countries always have this thirst for a bit more and we are able to fulfil this whim. We believe that we have arrived at a model that works very well.

“I think in Malaysia itself, we have enough malls of the traditional type. It has come to a point that we need the market to absorb what is available already before we move to the next level. People are getting more sophisticated and it means that branding plays a prominent role in personal preferences,” Chan explained.

On the financial front, he pointed out that 1Borneo’s success was in line with the management’s phylosophy of ‘zero borrowings’ which meant that at any point of time it would not be strapped for finances.

“We emphasise on the commercial aspect of the development because that gives you more retail space and the higher profit margins of the commercial investment will be able to provide a cushion for the overall project.

“In addition, our strong financial standing is due to the fact that we do not concentrate on big township developments, but concentrate purely on very condensed developments — anything less than 28 acres,” he said.

Chan also revealed that in these trying times the company availed of only local funding as foreign investments were regard as’not secure’ as it depended largely on the global economic outlook. “In terms of local market funding it was on a more permanent basis as local funds where considered more long term in nature.”

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