JPO a big hit with bargain shoppers
ONE month into its opening, Johor Premium Outlets (JPO) - a shopping haven joint-venture project between Malaysia’s Genting group and the US’ Simon Property Group - has been attracting strong crowds, especially during weekends.This spells good news not just for Johor’s tourism industry, but also for the development of Iskandar Malaysia.
Iskandar Malaysia, which aims to be the most developed region in the southern peninsular, needs something to get the average Malaysian excited about it and JPO is one of few projects that help provide it, analysts say.“Malaysians are shopaholics, so something like this stirs their adrenaline,” one remarked.
JPO, Southeast Asia’s first premium outlet, located in Kulaijaya, is a project earmarked under the country’s Economic Transformation Programme to boost tourism. It is expected to attract some three million visitors in its first year of operation. About 90 per cent of its Phase One’s 70 branded/designer stores, including Coach, Ferragamo, Burberry, Levis and Guess, are already operational. The rest, which include Polo Ralph Lauren, Tommy Hilfiger and Brooks Brothers, are being fitted out, according to a property research report by HwangDBS Vickers Research on January 16.
“Discounts range from 30 per cent to 60 per cent, a tad better than Singapore sales,” its analysts Yee Mei Hui and Quah He Wei said, noting that the “strong” crowds comprised both locals and Singaporeans. “We believe JPO will likely attract shoppers consistently, particularly from residents within the Johor state as well as visitors from Singapore, given its location that already has captive shoppers of 8.3 million (3.1 million population in Johor and 5.2 million population in Singapore) and ample car park space,” Hong Leong Investment Bank (HLIB) Research said in a recent report.
While JPO’s size may pale in comparison to similar outlets in the US, Japan and Hong Kong, Phase Two of its development could see another 60 outlets come up, bringing the total number of outlets to 130. Future development may also include a 2,000-room hotel and water-theme park. JPO, officially launched by Prime Minister Datuk Seri Najib Razak on December 11 2011, is a 50:50 joint venture between Genting Plantation Bhd’s Azzon Ltd and Premium Outlets, the outlet division of Simon Property Group.
HLIB Research estimated that JPO could contribute some RM11 million a year in net profit to Genting Plantations, a mid-sized plantations firm, from this year onwards. From an equity investment standpoint, HwangDBS believes that Genting Plantation, which owns 5,500 acres of land in Kulai, could be JPO’s largest beneficiary. “Every RM5 per square feet increase (from RM10 per square foot assumed) would raise its sum of total parts value by 10 per cent,” it said. It had a “buy” call on the stock with a target price of RM9.60 a share.
Genting Plantations’ stock, which fell by 2.3 per cent last year, last traded at RM9.28 on Friday, up 13 sen.
