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Borneo to see new $490m shopping mall

A huge new development project in Malaysian Borneo will soon be underway thanks to the signing of a joint venture agreement between two major firms. Suria Capital Holdings Bhd has joined up with construction and property development firm Gabungan AQRS Bhd to work on a plot of land on the island of Sabah.

This scheme, known as 'One Jesselton Waterfront', is set to be very lucrative for both firms, however it is also extremely ambitious. The sheer scale of the project brings with it a lot of risks that will have to be dealt with, while large aspects of the development are still in negotiation and could have a large impact on the value of the finished property.


Construction plans

The current plans for the land involve the construction of a massive mixed-use development centred around a shopping centre that has been named the 'One Jesselton Mall'. This will feature a net floor area (NFA) of 44,017 sq m of retail space.

Alongside the mall, the joint venture will also be constructing Suria Capital's new corporate headquarters. Called 'Suria Corporate Office', the building will have a NFA of 6,920 sq m. Another 6,958 sq m will be dedicated to a series of retail lots known as Suria Retail.

The development will also feature several residential units - including serviced suites, apartments and condominiums - as well as car parking facilities and a ferry ticketing office.


Acquiring the land

The location of the development is Kota Kinbalu, capital of the state of Sabah in Malaysian Borneo. The city used to be known as Jesselton, which is where the development gets its name. Work will take place on a seven-acre plot of land owned by Suria Capital as part of the 23.5 acres it was granted in 2003, when the state government privatised seven major ports in the region.


Size negotiations

The net sale value of this property has already been estimated at RM1.1 billion (around $297 million). However, that is based on an agreed floor area ratio of one to four, meaning an average of four sq m of floor space over multiple storeys can be constructed on each single sq m of land.

However, Gabungan AQRS is currently negotiating for a better ratio. The company is aiming for one to 5.6, which would significantly increase the size of the finished property. The higher ratio would allow the joint venture to create more floors and therefore more offices, apartments and retail outlets.

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