GuocoLand’s options open on monetising Damansara City Mall, talks with Lim fails

GuocoLand (Malaysia) Bhd is keeping its options open on how to monetise its Damansara City mall in Damansara Heights. The mall is located strategically at the massive development that is taking shape and which is seen as a viable alternative to Bangsar with two MRT stations being built at its vicinity.

Known as Damansara City Mall, or DC Mall, it is in its last lap of completion and is scheduled to be operational by the second quarter of next year. It has attracted tenancy of about 60%.

It is learned that the mall had attracted buyers, including Tan Sri Desmond Lim Siew Choon, who owns Pusat Bandar Damansara which is currently being redeveloped.

“Talks between GuocoLand and Lim have fallen through but there are other possibilities,” said sources.

Damansara City, an integrated development with a gross development value of RM2.5bil, comprises two office blocks, two residential blocks, the 4.5-storey DC Mall and a hotel with more than 300 rooms.

GuocoLand managing director Tan Lee Koon, when asked, did not deny that there have been suitors for the mall.

The other option is for GuocoLand to keep the mall, said sources.

“We are good neighbours,” Tan said, when pressed on the issue after the press conference yesterday.

Earlier this year, there were a bit of speculation that Lim was keen to buy over the GuocoLand’s DC Mall, which is part of an integrated development on 8.5 acres located in Pusat Bandar Damansara.

Lim, who owns KL Pavilion, and who is planning to replicate his retail success in Pusat Bandar Damansara, has 15.84 acres across the road from Damansara City. KL Pavilion is one of Kuala Lumpur’s most successful mall. Lim is Malton Bhd executive chairman and Pavilion REIT chairman.

Although the talks have fallen through, there are, neverthless, plans to connect DC Mall to Lim’s development via a covered walkway as Lim’s development will have direct access to the Pusat Bandar Damansara MRT station.

When broached on what happened at these “talks” which took place earlier this year, and what was the sticking point, Tan said there were talks but “nothing happened”. Tan said he met Lim “a few times” but declined to comment further.

The mall, with a net lettable area of about 170,000 sq ft is about half the size of Bangsar Shopping Centre (BSC). Up to 70% of its net lettable area will be food and beverage outlets, Tan said.

DC Mall “has to be different” because there are too many malls with the fashion element in the vicinity. Also, there are no plans to compete with Lim’s retail mall, BSC or Bangsar Village which is located in the commercial area of Bangsar.

The rental for the ground floor units will be about RM25 per sq ft compared with BSC’s RM35 psf. On an overall average basis, DC Mall will be leased at about RM8 psf.

At the press conference earlier, Tan said Hong Leong Group Malaysia will be consolidating its various companies and will be making a 33-storey office block in Damansara City its global headquarters. This means Hong Leong Bank HQ will be vacating its current place in Wisma Hong Leong, Jalan Perak in the city.

There are plans to either lease out Wisma Hong Leong or to redevelop the slightly more than 1 acre site with a higher plot ratio, according to a source. At press time, Hong Leong group, via GuocoLand, has yet to revert as to what it plans to do with Wisma Hong Leong. GuocoLand is the property arm of the Hong Leong group.

When Wisma Hong Leong, Jalan Perak was built about 20 years ago, the permissible plot ratio then was a lot lower and it will be able to get a better plot ratio. Wisma Hong Leong is owned by Hong Leong Assurance Bhd, a wholly-owned subsidiary of Hong Leong Financial Group.

Said a source: “They have two options and both the leasing and the business development departments are considering different possibilities.”

GuocoLand, which currently occupies three floors in Menara HP, will also be moving into second office block in Damansara City. It will occupy the 19-storey building and lease out the rest of the floors. Office rental in Damansara City is expected to be about RM7 psf compared to older Damansara Heights offices of between RM4 and RM4.50 psf. - By The Star