Paul Law, a Hong Kong businessman, will breathe new life into Tanjong Tokong, Penang's long-neglected Island Plaza, which was once a lively hub of commerce, entertainment, and social interaction.
Despite being in the prime Tanjong Tokong location, the historic building has fallen into disuse over the years due to the emergence of new shopping malls in the state presenting fierce competition.
Island Plaza, which opened in December 1995 and encouraged premium concept stores such as Versace, Fila, Oshkosh B'gosh, Polo Santa Barbara, and Mizuno to establish for the first time in Penang, was one of the biggest shopping complexes in Penang after Komtar.
The mall's anchor tenant was Metrojaya, which operated the department store, while Cold Storage (Malaysia) operated the supermarket until the shopping mall was closed for an extended time due to renovations.
The 500,000-square-foot local mall had been transacted a few times.
Asian Retail Mall Fund II (ARMF II) purchased Island Plaza from Belleview Group in 2007 for RM120 million and invested RM40 million in its renovation.
ARMF is a Pan-Asian real estate fund managed by Pramerica Real Estate Investors Ltd, the US-based Prudential Financial Inc's real estate investment management and advisory division.
The purchase of Island Plaza was part of Pramerica's RM1.1 billion investment in four shopping malls. The other three were new construction projects: SStwo Mall in Petaling Jaya, Selangor, Ampang Mall in Penang, and 1st Avenue in George Town, Penang.
Pramerica's funds have been attempting to offload assets such as Island Plaza.
It was reported in 2015 that Singapore-listed healthcare giant International Healthway Corp (IHC) was in talks with ARMF II to acquire Island Plaza for roughly RM115 million to expand its operations in Malaysia.
Law, who has been looking for excellent Penang land and structures, is thought to have purchased Island Plaza for an undisclosed sum soon before the movement control order was enforced on March 18, 2020.
He may have spent no more than RM130 million on the mall, according to a real estate specialist in Penang.
"The owners have been considering selling Island Plaza. The structure was deteriorating. So when they received an offer from Law, they acted fast. Given the mall's current state, Law will need to spend more than RM30 million to bring it back to life," he said.
Island Plaza is not Law's first investment in Penang. He owns multiple Penang properties, including The Boutique Residence Hotel Penang and Museum Hotel Penang.
To become a popular attraction, the mall will undergo reconstruction, remodelling, and extensive renovations, and be renamed 'Island 88.'
The work on the new Island 88 is planned to be completed later this year.
Chief Minister Chow Kon Yeow, in his speech at the groundbreaking event, said that the transformation of Island Plaza into Island 88 demonstrates their dedication to conserving Penang's tradition while embracing modernity and progress.
"This would not have been possible without the commitment of Paul Law and Philip Law from the management (Hong Kong), as well as their team's tireless efforts and dedication to ensure that this project is kickstarted with the highest standards of quality and safety.
"All is not lost though, and with the new management taking over, it's time to give it a much-needed new lease of life. Your unwavering dedication towards your vision of what Island 88 should be is similar to the values that make Penang a great place," Chow said.
The renovated Island 88 will be a modern, cutting-edge complex with world-class retail, dining, and entertainment opportunities.