Monday, 13 August 2018

(The Star) Reviving Komtar’s heyday a hard sell

Secluded shopping: Men walk past empty shop lot units at Level Three in Komtar, Penang.
Secluded shopping: Men walk past empty shop lot units at Level Three in Komtar, Penang. 

GEORGE TOWN: Empty shoplots and lonely corridors are still a common sight in Komtar. 

A total of 271 privately-owned shoplots are still vacant. 

An attempt by Penang Develop­ment Corporation (PDC) to buy these units back failed as PDC offered prices below what owners had paid for in the 1980s. 

Only a few owners accepted PDC’s offer. 

One owner, who bought his lot on Level Three of the old retail wing, said PDC offered some of them RM220 per square foot. 

“We bought our lot at RM230 per sq ft (psf) and were stunned by the offer. But after some thought, we accepted,” he said. 

The ex-owner said the service charge for his lot was RM24 psf and he did not pay this because he had stopped using the shoplot. 

“And for years no one would rent it from us. 

“My business partners and I are in our 70s now. Back when Komtar was the top shopping mall in Penang, we did so well. 

“I think the glory days of Komtar are over. Most shopping malls go through this kind of life cycle. 

“If we didn’t accept the offer, the outstanding service charge would have been high enough for PDC to claim our property without payment,” he said. 

Another owner, who inherited it from her late husband, said her family members were unhappy with PDC’s offer price. 

“But we are all old now. We don’t want to be burdened with useless property. 

“My husband spent decades running his business in the unit and we have sweet memories of that time. It is all over now,” she added. 

Many other owners, especially those on the ground floor and close to the main concourse area of Level Three, are holding on, hoping for a more equitable price. 

A real estate valuer described the offer price as “peanuts”. 

“How can you offer something that is below the 1980s price? That is too unfair, especially for a state government agency. 

“Units on the ground floor, and facing Penang Road, should be worth over RM400 psf now,” he said. 

The redevelopment of Komtar has been hobbled for years. 

With every owner looking after their lot, the lack of focused effort put paid to plans to tap into Penang’s most central commercial address. 

Komtar assemblyman Teh Lai Heng, who is also political secretary to the Penang Chief Minister, said there were plans to rent out privately and PDC-owned lots to anchor tenants. 

“If there is a group of people or a company interested, we can rent out the units. 

“However, right now some are owned by PDC and some privately owned,” said Teh. 

“The units are also scattered, making it difficult to rent out to an anchor tenant. 

“We urge all private owners to consider renting out their units with PDC. 

“We also welcome businesses which are interested in becoming anchor tenants to participate in the concept,” he said. 

Asked if this would entail a real estate investment trust (REIT) arrangement, Teh said private owners should first show interest in renting out their units. 

PDC Urus Setia chief executive officer Datuk Ang Choo Hong said there were currently 271 privately-owned lots that were vacant in Komtar. 

“We were able to identify all the owners. 

“We got in touch with them when they came to pay the service charges. 

“We indicated to the owners our interest to rent out their units to anchor businesses, but most of them have not responded,” he said. 

The 68-floor Kompleks Tun Abdul Razak (Komtar), which is named after Malaysia’s second prime minister, started operations in 1986.