ST : New Jurong leisure centre gets go-ahead

Jan 23, 2010

New Jurong leisure centre gets go-ahead

Plans to rebuild old complex shelved last year during downturn

By Harsha Jethnani

A LAVISH new entertainment complex for Jurong has received the green light after being put on the back burner during the financial crisis.

The manager of CapitaMall Trust (CMT) told a results briefing yesterday that the facility - including its Olympic- sized ice-skating rink - should be ready in early 2012. Demolition of the old Jurong Entertainment Centre will be completed soon.

The new centre has been designed by Benoy Architects, the group that conjured up the Ion Orchard look.

Besides the ice-skating rink, which will be visible from the surrounding eateries, the centre will have a rooftop garden plaza and cinema alongside retail outlets.

Mr Simon Ho, chief executive of CapitaMall Trust Management Limited, which manages CMT, said the centre will have five storeys and three basement levels. There will be a 24-hour linkway to the Jurong East MRT station.

He said that plans for the centre were reactivated after a deferment last year due to the economic crisis and sky-high construction costs. But he said the retail sector is looking up again.

The retail sales index - an industry measure - was up 4 per cent last November from a year earlier. This was the first increase in 13 months.

CMT's positive fourth-quarter results also increased confidence about tackling the Jurong centre.

It will have retail floor space of 204,153 sq ft with average rent per sq ft estimated at $12.26, a 123 per cent increase from the $5.49 psf level at the old centre. The project is expected to cost $200.3 million and generate 8 per cent in return on investment.

CMT's manager also said yesterday that reconfiguration works at Basement 1 of Raffles City Shopping Centre has started. This is to facilitate the building of a linkway from Basement 2 to the upcoming Esplanade MRT station. It will open in the third quarter of this year. About 63 per cent of the retail floor space in the link is pre-committed.

Shopping malls certainly delivered the goods for CMT in the last quarter.

Increases in revenue from five CMT centres - Bugis Junction, IMM Building, Lot One Shoppers' Mall, Plaza Singapura and Tampines Mall - coupled with savings boosted the bottom line. Distributable income for the three months to Dec 31 increased by 25.5 per cent to $76.5 million from the same period in 2008.

Distribution per unit (DPU) was 2.4 cents, 24.4 per cent higher than the 1.93 cents paid out for the fourth quarter of 2008. Payouts will be made on Feb 26.

Fourth-quarter gross revenue increased 4.2 per cent to $140.1 million while net income rose 32.5 per cent to $61.8 million over a year ago.

Property operating expenses decreased by 9.3 per cent to $44 million. Full-year gross revenue rose 8.2 per cent to $552.7 million while net property income was up by 10.4 per cent at $376.8 million.

It sent full-year DPU 17.7 per cent higher to 8.85 cents from the previous year's 7.52 cents.

The retail landlord maintained 99.8 per cent occupancy throughout last year and renewed 614 leases.

Positive rental reversions of 3.4 per cent in the last quarter and an overall 2.3 per cent increase in rental rates for the year were good achievements in a tough year, said Mr Ho.

'Retail rents are likely to remain stable. In addition to active lease management, we will continue to drive DPU growth through asset enhancements, selective acquisitions of yield-accretive properties and prudent capital management,' he added.

CMT units dropped four cents to $1.78 after the results were announced.