JOHOR BARU: The presence of a number of abandoned shopping malls in Johor's glittering capital city has raised concerns about what's next for these decrepit buildings.
These once-bustling retail outlets are now mere shadows of their former selves, boarded up and lying in ruin.
The New Sunday Times' checks on three of these malls — Lot 1 Waterfront City Mall, Danga City Mall and Skudai Parade, reveal stories of financial woes and in some cases, their inability to adapt to changing times.
However, not all is lost. The Johor government will kickstart the rejuvenation for some of these structures, which could involve either redeveloping the buildings or tearing them down to start anew.
DANGA CITY MALL
Danga City Mall, initially known as The Best World when it was launched in 1996, counts as among the casualties of the 1997 Asian financial crisis.
The RM240 million seven-story shopping mall, featuring more than 500 retail units and over 46,000 sq m of retail space, was touted as the next big thing ahead of its opening.
There was reason for optimism. Given its prime location in the city centre, the mall drew investors who paid premium prices of RM3,300 per sq ft, almost triple the average market rate during the late 1990s.
A railway halt attached to the mall, which ferried passengers to and from Johor and Singapore at a special rate of RM3 and S$3, was another attributing factor to 75 per cent of its outlets being snapped up prior to its grand opening.
The euphoria was short-lived. The Asian financial crisis saw the mall's closure two years later.
Its doors remained shuttered for almost 10 years until the then menteri besar Tan Sri Abdul Ghani Othman came to the rescue with a state government revival plan backed by private investors and government-linked companies.
On National Day in 2008, the mall, now Danga City Mall, was reopened and branded as the state's first digital mall. An exhibition centre was added to boost its attractiveness.
However, the mall struggled to shake off its troubled past and was beleaguered by non-performing loans, which led to poor maintenance of its facilities.
Locals claimed that the mall had patchy Wifi connection due it being surrounded by tall buildings.
In 2018, it closed its door again on the pretext of refurbishment and upgrading works.
Today, a proclamation of sale notice via an online public auction can be seen at its barricaded entrance, with banks hoping to recover their non-performing loans since November 1994.
SKUDAI PARADE
The Skudai Parade shopping complex was opened in 1999 to great fanfare.
Located in Jalan Skudai, it spanned over 3ha of valuable real estate, boasting more than 300 retail outlets across multiple floors, as well as two residential apartment blocks and parking space for over 1,400 vehicles.
Skudai Parade's "old school" vibe proved to be a draw for labourers and foreigners working in the state capital, which saw many flocking to the mall after working hours.
However, the emergence of newer, large-scale shopping malls with modern amenities and expansive offerings, posed a formidable challenge to the more traditional Skudai Parade.
With the number of visitors dwindling, its tenants eventually moved out, leaving the mall with unresolved management issues and eventually saw it being put up for auction.
Its financial difficulties led to its takeover by RHB Bank Bhd in 2011, just 12 years after it first opened.
The mall is now abandoned. Efforts to obtain more information about its future remain futile up to press time.
LOT 1 WATERFRONT CITY MALL
The Lot 1 Waterfront City Mall, commonly known as Lot 1, was an ambitious RM6 billion project envisioned as a key component in Johor's transformation into a world-class commercial and financial centre.
It was initially slated to contain office blocks, condominiums and a hotel along a 2.5km-long seafront.
Built over water in 1996, the floating city project aimed to capitalise on its strategic location overlooking the Straits of Johor, and draw spillover economic opportunities from Singapore.
However, the rest of the development did not kickoff, save for the construction of Lot 1, which went into operation in 2000.
At its launch, Lot 1 had over 400 shop lot units and a net retail space of more than 35,000 sq m.
After three years in operations, the project was abandoned in 2003 due to a host of concerns.
Since then, attempts have been made to revive Lot 1, but were met with logistical and financial obstacles.
Checks at the mall show that it has been vandalised, stripped of metal parts for scrap, with its roof collapsed and windows shattered.
State Housing and Local Government Committee chairman Datuk Mohd Jafni Md Shukor said about 300 of the shoplots were privately-owned, so finding an amicable solution was beset by legal and financial complications.
In April last year, the New Straits Times quoted sources saying that Lot 1 could be converted into a commercial building similar to the KL Tower with an estimated gross development value of RM1 billion.
However, Mayor Datuk Mohd Noorazam Osman played down the suggestion, saying the building's interior was beyond repair.
He said its structural strength was questionable and that any attempt at refurbishment would be uneconomical and unpractical.
Discussions between the council and owners, he said, point toward demolishment.
"There are plans to transform the area into an open air square which will serve as a tourist attraction for locals and visitors to enjoy the beautiful waterfront scenery," he said.
The Johor Baru City Council, he said, was in discussions with private sector investors and government-linked-companies to fund the transformation of Lot 1 into a landmark for Johor Baru.
HOPE ON THE HORIZON
Jafni said the state government was working on a mutually-beneficial outcome to address the issue of abandoned shopping malls.
He said that this was not an easy task as in many cases, these malls had changed ownership several times, with its units privately-owned.
"These shopping complexes are in prime areas and their real estate value run into the millions," he said.
He said efforts were underway to revive these malls, either via revitalising the retail concept or even re-purposing the buildings.
He also said several abandoned malls have been given a new lease of life over the past year.
He cited the example of the Capital City Mall in Tampoi, which closed down after 16 months of operation due to the financial constraints brought about by the Covid-19 pandemic.
Singapore-based Mustafa's Pte Ltd bought 591 unsold retail units at the mall.
The RM368 million deal included 374 accessory parcels, comprising alfresco and multipurpose areas, and all 2,181 car park lots for the mall, located just a
20-minute drive from the Causeway.
Mustafa's managing director Mustaq Ahmad had said the company, famed for its flagship 24-hour Mustafa Centre in Singapore's Little India district, planned to transform Capital City Mall into its flagship store in Malaysia.
Another retail centre, Pacific Mall in Jalan Storey, which was abandoned in 1997, is also getting a second life.
The mall's owner, Johor-based SKS Group Sdn Bhd, had in July last year announced a deal with hotel giant Marriott International Inc to breathe new life into the retail space by changing it to the 345-room Sheraton Johor Baru.
SKS Group inked a deal with Alliance Bank Malaysia Bhd on a RM250 million green loan facility to finance the mixed-use development.
The development will comprise a retail podium, a hotel and office spaces that will be certified with GreenRE's Gold rating once completed.