Paliburg plans more shopping malls despite siting problems
PALIBURG Group intends to expand its development of shopping and entertainment malls despite difficulty in locating good sites.
'We hope to do more shopping mall projects, but it's difficult to find suitable sites,' said general manager (property) I P Chu.
He said such projects - which generated good and steady rental income - made more money than office towers, commercial-cum-office complexes and residential developments.
Group director Donald Fan said shopping mall development benefited from the territory's brisk retail industry.
'Hong Kong's retail market is good and will continue to do well,' he said.
However, Mr Chu said there were not many suitable sites for shopping malls.
'For one thing, a shopping mall needs a sufficiently large site which can be difficult to find.' Paliburg started shopping mall development with the 630,000 square foot Kowloon City Plaza, which celebrated its first anniversary yesterday.
In the past year, the mall generated a rental income of $150 million.
The group expects it to make about $160 million next year because it is revising some rentals.
Now 99 per cent occupied, the mall rents for an average $50 per sq ft monthly, with the highest rental more than $200 per sq ft.
Mr Chu expects the group's second shopping mall, Red Hill Plaza, to generate an annual rental income of $30 million.
The 44,000 sq ft property is scheduled for completion in the third quarter of next year and for occupation by the end of next year.
Mr Fan expects the Tai Tam property to be leased for about $100 per sq ft monthly, although rentals have yet to be finalised.
The group has already received lease applications from potential tenants, who will pay more than $80 per sq ft per month.
Mr Chu said the two-storey complex - with one storey for shops and another for restaurants - would be the only shopping mall in the district.
'We hope the restaurants there will attract people to their neighbourhood in the same way restaurants in Lan Kwai Fong and Stanley do,' he said.