18 June 2019
CENTRAL Pattana Plc, or CPN, has plans to open at least two new shopping centres in Malaysia and Vietnam “as soon as possible” after the successful opening here last week of its first Malaysian shopping centre, Central i-City, built at a cost of Bt8.5 billion.
“We are studying two land plots in the country to prepare for developing the next shopping centre in Malaysia, and are also eyeing two new land plots to develop a shopping centre in Vietnam,” said CPN’s deputy chief executive officer, Wallaya Chirathivat, after the grand opening of Central i-City on the weekend.
“We have to take the time to properly study to find the solution that gives us the best business model for each country.”
She said the company could not promise the timing for the next shopping centre projects in Malaysia and Vietnam. When expanding into overseas investments it is important to learn the legalities of investing in each country, as well as to learn the behaviour of local consumers before making a final decision said Wallaya.
“For our first project in Malaysia, the new shopping centre in Shah Alam, we took seven years to study and learn before completing the project. For the next one in Malaysia, and Vietnam, we also have to take time to study before finalising the deal. However, we will try to do so as soon as possible,” Wallaya said. The investment in Central i-City, Shah Alam, is a joint venture with its Malaysian partner, i-Berhad, the owner of the i-City Project, a mixed-use project that boasts the shopping centre as well as condominiums and an office building. CPN holds a 60 per cent stake in the JV firm while 40 per cent is held by i-Berhad with an investment budget of Bt8.5 billion.
The company expects it could take up to 10 years to recoup its investment cost, Wallaya said.
Prior to the weekend’s official opening, the project had held a “soft launch” since March 23. Shopper numbers averaged 30,000 daily over weekdays, and above 50,000 a day during weekends, which Wallaya deemed a success. The customers’ spending records averaged 100 ringgit (Bt749) per head per square foot per month. The project has retail space totalling 904,000 square feet, with 350 retail shops and an opening occupancy rate of about 80 per cent with expectations of achieving 85 per cent by October this year.
“We decided to open our first overseas shopping centre in Malaysia because we saw the purchasing power of the Malaysian people, who have an income up to 200 per cent higher than Thai people. Although the population is lower than for Thailand, the country’s economy also has constant growth,” Wallaya said.
Vietnam also presents a challenge, inviting business expansion as that country’s economy continues to grow and purchasing power is hitting record highs, Wallaya said.
“Our investment expansion in Asean is in line with our business strategy to be a ‘regional retail platform’ in this region. Our strategy will pave the way for and introduce Thai brands into the international markets and offer sustainable business growth with CPN. We will also support Thai brands and products as well as tourism by spearheading a concept of ‘Thainess to the World’,” she said.
Meanwhile, the company is also creating a platform to support the introduction of Malaysian and Vietnamese products to Thailand as part of the company’s aspiration to be the retail platform for the region.
“We want to be ‘the’ retail firm in Asean,” Wallaya said.
Currently, Central i-City has attracted four Thai firms to open up shops in the centre, including Amazon Cafe, Black Canyon, John Henry, and Trudy &Teddy. The new centre also includes Thai restaurants owned by Malaysian people, some of which are locally operated franchisees of Thai brands.
“We believed that with our success in opening our shopping centre in Malaysia, we would challenge Thai investors to open their shops in Central i-City and in the other new projects that we will launch in Malaysia and Vietnam shortly,” she said.
Wallaya added that Asean offers the firm regional potential for its business expansion after having opened 33 shopping centres in Thailand.