MCT building last phase of One City

THE metamorphosis of a property group usually begins in the construction sector, then evolves into design and property development before it matures into an asset holder.

MCT Bhd’s story seems to be unfolding in that order, although it is still in the property developer stage currently.

As its flagship project One City in USJ25, Selangor enters its third and last phase of development, chairman Tan Sri Barry Goh Ming Choon says the group will keep 75% of its 3 million sq ft of net lettable space for recurring income.

One of the ways to maximise lettable space is leasing its 12 cinema halls out for seminars during the day and running movies in the evening and night.

The gross development value of phase 3 is RM3.5bil. Keeping 75% of it is expected to translate into RM2.63bil revenue for the group, he says.

To be sold are 1,300 units of small office flexible office (SoFo). These will be housed in two towers and these units will have built-up areas of between 450 sq ft and 1,500 sq ft.

Goh says the rationale for keeping three-quarters of net lettable space is to enable the group to increase its recurring income to about 50% of group revenue in five years.

“We’re targeting to derive 50% of our revenue from rental income and another 50% from ordinary development works,” he tells StarBizWeek.

“Our recurring income at the moment is still very small, the single-digit performance makes up less than 10% of the total figure,” he says.

For the financial year 2014, Goh believes that MCT should be able to achieve a decent triple-digit recurring income as it gradually consolidates its assets to become a listed company.

Goh: ‘You name it, we’ve got it

MCT recently proposed to take cash company GW Plastics Holdings Bhd over for RM1.21bil. It is still working out a regularisation plan to submit to the Securities Commission.

One City, as an integrated development, will occupy 31.16 ha. It is sited about 30 minutes from the KL International Airport, Sepang. It is accessible via the Damansara-Puchong Highway, Elite Highway, Subang Jaya and Putra Heights.

Within a 5km radius of One City is a population catchment of 1.5 million, Goh says. MCT acquired the land in 2007 from Sime Darby Bhd.

Phase one and two which are currently about 90% completed will have total net lettable area of 1.8 million sq ft, divided evenly between office and retail components. There will also be a park big enough to hold a concert for 10,000.

Goh’s ambition is to work with the Tourism Ministry to host cultural performances and exhibitions there.

MCT Mall

Its third and last phase will be the largest within the development. It is sited adjacent to the first two phases. Dubbed the MCT Mall, it will have 1.5 million sq ft of retail space. Four 45-storey blocks, comprising a corporate office tower, two hotels to occupy a block and two SoFo blocks will be located on this retail podium block.

The Grade A corporate office development boasts of 1.5 million sq ft, equivalent to the retail space. The two hotels will have a total of 900 rooms. There will also be an auditorium with a capacity for 2,500 and a 9,000-bay basement carpark.

When completed, the entire One City development will have a total of 12,000 car park bays.

Goh has hired retail advisor Sim Hai Yeun to bring in brands for the retail component.

Sim’s previous positions include being the general manager of Marks & Spencer and Berjaya Times Square retail chief operating officer. He brought departmental store Debenhams into Malaysia and introduced Escada and Hugo Boss into the Vietnam market.

Although the group is still finalising the plans for the third phase, it is estimated to have 1,300 SoFo units, ranging from 450 sq ft to 1,500 sq ft.

But leasing division general manager Joe Hue says these units will not come with car park bays.

“It would be a waste when the residents go out to work and the bays are left empty. We want to open the car park to the office crowd during working hours and when they are empty at night, the SoFo residents can use them,” Hue says.

One City will have all the facilities which can currently be found in malls. Says Goh: “You name it, we’ve got it.”

“People who work here will not be bored. We have all sorts of entertainment outlets, eateries and facilities like a 1,500 pax banquet hall and a 20,000 sq ft convention centre,” says Goh.

Sim adds that the group is taking a leaf from thriving malls like Suria KLCC and the Pavilion when it decided to have a 1:1 ratio for office and retail space of 1.5 million sq ft each. “Our retailers need the crowd. We have planned for enough offices so there will be a sustainable amount of traffic,” he says, adding that this month, 4,000 employees with multinational companies will be entering One City.

In essence, One City will have two main malls, Sky Park which has Malaysia’s largest rooftop food and beverage area, and The Place which has a column-free rooftop banquet hall. Sky Park will also have office suites sitting above four floors of shops and an adjoining four-star business class hotel, to be known as eCity Hotel which will be operated by the group.

Next to The Place will be 63 units of shophouses.

A smaller other residential component within One City, called The Square, is in phase 2 and comprises 343 SoFo units of between 500 sq ft and 800 sq ft.

The last transaction price, Hue said, was RM700 per sq ft for The Square which is still under construction. The Square was fully sold out within two weeks of its launch in 2012. It transacted at RM650 per sq ft then.

Goh says the development has received the Green Building Index Provision Silver certificate. A key green feature is its use of natural light to lit the interiors of Sky Park.

Besides One City, MCT has also other residential and mixed developments in Cyberjaya, Subang Jaya, Rawang, Shah Alam, Serdang and Bangi. It also has an upcoming development in Johor.

The Sitiawan-born Goh comes from a humble background. His parents were farmers. Goh started his working life by setting up a business selling electronic goods. He subsequently ventured into building electrical substations before entering the property sector.

Having come a long way establishing MCT, he now hints of expanding overseas but refuses to divulge more other than the intention to ride on MCT’s soon-to-be listed status.