Hunza eyes mall rental income from 2013

Property development in Penang is moving at a feverish pace with buyers crazy over owning prestigious addresses like Gurney Drive and all the way up from Tanjung Tokong to Batu Ferringhi.

Against such a backdrop, it is crucial for property players to introduce value-added development and feature attractive points to stand out among competitors, just like Gurney Paragon, an iconic development along Gurney Drive.

Sited on a freehold land measuring 4.08 hectares, Gurney Paragon is an integrated development comprising two blocks of high-end condominiums, an office block, St Joseph's Novitiate (St Jo's), three-storey podium retail lots and a shopping mall of approximately one million sq ft of retail space.

The attraction is that the development surrounding St. Jo's, a heritage masterpiece, will be used to host events such as meetings, weddings and conventions.

Developed by Hunza Properties Bhd, a well established property developer in the northern region, Gurney Paragon is the most eagerly awaited shopping centre by Penangites and foreigners.

Hunza Executive Chairman Datuk Khor Teng Tong said the development of Gurney Paragon was in line with the group's plan to transform itself from a property developer to one which is also a real estate landlord.

"Hunza is expecting rental income from Gurney Paragon beginning next year of between 10 and 12 per cent earnings before interest, taxes, depreciation and amortisation returns on investment in the first three years.

"The rental income stream from the mall will enable Hunza to have a strong base for recurring income," he said.

Khor said approximately 40 per cent of the Gurney Paragon integrated development (2 blocks of condominium) was for sale and the remaining 60 per cent would be kept for long-term investment.

He said the shopping mall, office tower, St. Jo's and three-storey podium retail lots would be owned, managed and operated by Hunza, adding that the residential segment comprising 220 units were 90 per cent sold.

Selling price has increased from RM400 per sq ft, when it was launched in 2007, versus the current price of over RM900 per sq ft, reflecting not only the trend in Penang, but also, more specifically the five star product and prime location.

The total gross development value for the Gurney Paragon condominium is approximately RM500 million while the mall and office component is projected at RM500 million.

Khor said between 280 and 300 outlets were expected to flood Gurney Paragon beginning May 2013 when phase two of the mall opens for operations.

Currently, there are several tenants operating in phase one of Gurney Paragon, comprising the three-storey podium and St. Jo's -- namely Goku Roku Ramen, Pacific Coffee Co, TGI Friday's, Brussels Beer Cafe, Meet Fresh, Italianniesse, The Coffee Bean & Tea Leaf, Wong Kok Char Chan Teng and Share Tea.

Khor said Hunza was constantly adding established names but new to the Penang scene to its list of tenants. -- Bernama