HK Land, City Prop team up

By Yap Leng Kuen

HONGKONG Land Ltd, the largest commercial landowner in the central business district in Hong Kong, is teaming up with City Properties Sdn Bhd (City Prop), developer of luxury retail centre Avenue K in Kuala Lumpur, to provide its renowned brand of retail management services. 

The partnership was not likely to end there, sources said, pointing to the possibility of an equity stake by Hongkong Land, which owns a dozen top quality commercial buildings in Central, Hong Kong. 

Included in this portfolio are The Landmark Atrium shopping complex with an MRT (mass rail transit) station and link to Chek Lap Kok international airport, both the tower blocks of Exchange Square One and Two, Jardine House, The Forum, Gloucester and Edinburgh Towers and the Hong Kong Club Building. 

Avenue K, which is sited across the Petronas Twin Towers and Suria KLCC shopping centre, is targeting a year-end opening for its complex of 400,000 sq ft retail space. The lower and upper concourses have been open since January. 

The project is pioneered by Jeff Yap, the eldest son of Datuk Yap Yong Seong, popularly known as Duta Yap. 

Hongkong Land, which owns commercial assets worth US$6bil in Hong Kong, has its main listing in London and is also traded on the Hong Kong and Singapore stock exchanges. 

In its announcement yesterday to the stock exchanges of London and Hong Kong, Hongkong Land, which is part of the Jardine group, said it would provide strategic consultancy on tenancy mix, leasing assistance, building management services, and marketing management activities. 

Hong Kong Land director of retail Norman Leung (left) exchanging document with City Properties Sdn Bhd director Jeff Yap. In the background is a model of Avenue K and K Residence.

This teaming up of a British conglomerate with City Prop is seen as a signal of confidence not just in Avenue K but also the retail market in KL. 

To Hongkong Land, Avenue K’s uniqueness lies in, among other factors, the availability of an underpass to KLCC and LRT (light rail transit) link to the KL International Airport. 

Avenue K's shopping complex is 65% signed up. “With Hongkong Land running the complex, it is likely to be fully tenanted,'' said Jeff Yap, director of City Prop. “They have a strong brand name and have been running shopping centres for decades.'' 

Hongkong Land executive director (commercial property) Ian Hawksworth said: “We are confident that Hongkong Land's proven experience in the luxury retailing sector in Hong Kong and across Asia will be of great benefit to Avenue K.'' 

The group’s commercial developments in Asia include Singapore, Bangkok and Vietnam. The group is exploring development possibilities in mainland China. 

At this juncture, it is unclear as to the stake Hongkong Land will take in City Prop. Basing on the initial public offering price of KLCC at RM1,500 per sq ft, Avenue K with 400,000 sq ft of retail space, could fetch a market value exceeding RM500mil. 

On top of Avenue K will be K Residence, with two blocks of towers comprising condominiums as well as hotel and serviced apartments, targeted for completion in 2008. 

K Residence has been launched in KL, Singapore and Hong Kong. It is 75% sold and is going for RM1.2mil to RM3mil, with prices ranging from RM750 to RM1,000 per sq ft.