KOMPLEKS PUSAT BANDAR PASIR GUDANG TURN AROUND STRATEGIES 1.0 Introduction Kompleks Pusat Bandar Pasir Gudang (KPBPG) is a three-storey shopping complex owned by Majlis Perbandaran Pasir Gudang located 30km east from Johor Bahru city centre. This complex is located at the center between huge industrial park and booming new housing development. KPBPG is erected on partial of lot PTD 76822 , mukim of plentong with measuring land area of about 9.9 acres and surrounding by Hotel, bus station, Business Center and Sport Complexes. Details of KPBPG are as follows: a Lot No b c d e f g
: PTD 76822 Mukim Plentong Land area : 9.9 acres Land use : Building Gross floor ar area : 478,859 sq sq ft ft Nett Nett Lett Lettab able le Area Area : 270,4 70,495 95 sq ft ft Year was built : 1986 Value : 62.75 million
2.0 OBJECTIVE The objective of this paper is to present the proposal to turn around of KPBPG to have more comprehensi comprehensive ve mix as a shopping mall which which will later be transforme transformed d into a vibrant, vibrant, convenient and exciting exciting shopping shopping environment that appeals to shoppers. At present, KPBPG caters mostly the need of the day time employees who commute to work in Pasir Gudang. They fill up the KPBPG during day day time. The addition additional al target target group group would be the growing growing families families in Pasir Gudang, where the families are are expected to spend the better part part of the day here. It will become the weekend thing for families where they go for
grocery and apparel and tried the different eateries, wheeled their prams around the archades either shopping or family outing. The repositionin repositioning g is important for KPBPG KPBPG to attract more shoppers shoppers and generate generate higher rental income in the growing competition competition from other shopping complexes. In view of the reposition, we have forwarded a proposal proposal on the purchase of Kompleks Pusat Bandar Pasir Gudang (KPBPG) from Majlis Perbandaran Pasir Gudang (MPPG) at a value of RM 62.75 million on the following terms of payment :
Upon si gn gning S& P Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total
: : : : : : : : : : :
11.75 mi mil 5.0 mil 5.0 mil 5.0 mil 5.0 mil 5.0 mil 5.0 mil 5.0 mil 5.0 mil 5.0 mil 5.0 mil 62.75mil
3.0 SWOT ANALYSIS OPPORTUNITIES •
STRENGTHS •
Increase supply of retail area
•
Incraease supply office space
•
WEAKNESSES •
•
kurang daya tarikan daripada pengujung.
KPBPG is located in the strategic area of Pasir gudangLokasi
Bangunan yang lama menyebabakan
•
•
Tempat membeli belah yang terhad.
belah yang lain seperti Tesco dan
Projek Pembinaan hospital pakar
Kip Mart
Pembinaan lebuhraya – Lebuhraya
•
Peningkatan harga minyak
•
Kelembapan ekonomi global
Persisiran menghubungkan Johor Bahru – Pasir Gudang dan Lebuhraya Plus yang menghubungkan Pasir
berhampiran kawasan kediaman di
Gudang-Desaru.
lengkap dengan terminal bas dan
Persaingan daripada kompleks beli-
Sekitar Seperti Taman Bukit Dahlia
tengah Pasir Gudang serta
sebelah utara dan indsutri di selatan
•
berhampiran
kompleks yang terletak di tengah-
•
THREATS
Projek Perumahan Di Kawasan
•
Pelancaran Berth baru di pelabuhan Tanjung Langsat
teksi , masjid, pusat membeli belah , bank , jabatan kerajaan serta berhampiran dengan pusat perniagaan yang lain . •
3.1 Financial Financial Performance Table 1 : Profit & Loss (RM Mil)
Kompleks mempunyai keluasan kasar sebanyak 478,000kps memberi ruang untuk kerja menambah baik dan naiktaraf naiktaraf sesuai dengan keperluan semasa kompleks.
Year 2000
00
01
02
03
04
05
06
07
08
09
Total Income (RM) (-) Expenses (RM) Net Operating Profit
2.7
3.9
3.6
3.5
3.8
4.3
3.9
4.3
5.0
5.3
4.4
4.5
4.4
4.7
5.0
5.0
5.5
5.5
5.9
5.1
-1.7
-0.6
-0.8
1.2
-1.2
-0.7
-1.6
-1.2
-0.9
0.2
As indicated in the above table, KPBPG has experienced loss since year 2000 with an exception for the financial year of 2009, during which it recorded a net operating profit (NOP) of RM222,873.51. RM222,873.51. This was a result of control and monitoring exercise in operation cost especially electricity. However this result is not enough to cover our new proposal to purchase KPBPG from MPPG. New strategy must be implemented in order to sustain installments payment to MPPG
3.2 Surrounding Shopping Complexes/ Complexes/ Competitors
There are a few shopping complexes within the vicinity with total lettable area ranging from 56,000 sq ft to 265,000 sq ft. Table 2 below shows the various sizes of shopping complexes in Pasir Gudang area and year operating business. KPBPG was open in year 1986 with old design and business concept compared with new building such Tesco Sri Alam in which more suit of current trend shopping mall.
Table 3 : Ratio Number Of Shoppers in various Shopping Complexes
No
Centres
1
KPBPG
2
Kipmart Masai Econ Save
3 4 5
3.3
Today’s Market Tesco Sri Alam
Lettable Area(sq ft) 265,000 120,800
Year Open 1986 2004
56,000
2004
155,000
2005
250,000
2008
Ratio Number of Shoppers in Various Shopping Complexes
Lettable Area (sq ft)
Number Ratio No of Of shoppers/ Shoppers/ sq ft Month
1
KPBPG
265,000
132,000
0.49/sq ft
2
Kipmart Masai Giant Plentong
120,800
463,300
3.8/sq ft
166,099
600,000
3.6/sq ft
4
Econ Save
56,000
102,600
1.8/sq ft
5
Tesco Sri Alam
250,000
450,000
1.8/sq ft
Table 2: Surrounding Shopping Complexes
No
Centres
3
Table 3 above shows the ratio of number of shoppers in various shopping complexes. Ratio shoppers per square feet for KPBPG is 0.49/sq ft which is much lower as compared to the surrounding shopping complexes. Number of Shoppers statistic is very important cause its can reflect the rental rates of the retail lot.
4.0 STRATEGIES TO TURN AROUND KPBPG
4.1 PROPOSED REPOSITIONING OF KOMPLEKS PUSAT BANDAR PASIR GUDANG
UO Superstore Sdn Bhd currently occupying an approximate area of 10,000 sq ft, it is considered insufficient to cater to the population of Pasir Gudang as compared to the other shopping complexes such as Tesco, Kip Mart and Econsave as shown below. Furthermore, the basic requirement of area for a full-fledged supermarket is 23, 000 sq ft.
Retail is one of the fastest-growing and constantly-changing industries. As KPBPG was built in the era of 1980’s, the mall now needs to keep up with the current trend. Therefore, to attract new whilst retaining the existing shoppers, repositioning exercise should be implemented.
The proposed repositioning of Kompleks Pusat Bandar Pasir Gudang (KPBPG) will be under the segment of Suburban Shopping Centre targeting for more family-based shoppers. Existing environment KPBPG attract more young and working group compared to family based shoppers, therefore with new proposed repositioning is expected to combine the two groups into a more comprehensive mix. In addition, KPBPG would allocate specific area to be designated as Industrial Supplier Center to enhance the repositioning exercise.
Table 4 : Area of Supermarket In Shopping Complexes
No
Shopping Complex
1 2 3 4 5
KPBPG Kip Mart Masai Econ Save Today’s Market Tesco Sri Alam
Supermarket Area (Sq/ft) 10,000 29,500 39,000 34,100 54,000
Proposed refurbishment works to be carried out are as follows:4.1.1 4.1.2 4.1.3 4.1.4
4.1.1
Level 1 Level 2 Level 3 Repaint Façade
The proposal is to expand the supermarket to 42,700 sq ft by providing additional area. This will be made possible by converting the atrium to become a part of the supermarket.
Level 1 Refurbishment
This will eventually encourage the existing anchor tenant to offer an even wider range of products variety especially dairy and fresh produce sections.
Level 1 refurbishment will be included the following items: 3.1.1 To Expand the Supermarket Area Supermarket typically comprises sections for namely, fresh produce, dairy and baked items alongside canned and packaged goods. It will also provide nonfood section such as household items, pharmaceutical products and pet supplies.
The exercise will also offer convenience with the open space carpark and the new proposed carpak area.
4.1.2
Level 2 Refurbishment
Level 2 refurbishment will be included the following items: a)
To Expand Departmental Store
Departmental store is a retail establishment which specializes in satisfying a wide range of the consumers personal and residential durable product goods product needs, at the same time offering the shoppers a choice multiple merchandise lines, at variable price points, in all product categories. Departmental store usually sell products including apparels, furniture home appliances, electronic, kitchen utensil, toiletries, cosmetic, jewellery, toys and sporting goods. The existing anchor tenant, UO Superstore allocation for departmental store is about 25,800 square feet. The existing departmental store is located on level two and level three which was not convenient to the shoppers.
Recently UO Superstore has shown keen interest to expand its departmental store thus allowing another 42,700 square feet at Level 2.
Table 6 : Total Area of Department Store In Shopping Centres
No
Shopping Center
1 2 3 5
KPBPG Giant Plentong Tesco Plentong Tesco Sri Alam
Dept Area (Sq/ft) 25,800 53,000 64,600 32,400
Store
Expanding the departmental store area is essential to attract more shoppers to KPBPG.
Picture 3 : Existing view of the limited size supermarket
Picture 4 :Existing atrium area will be converted into larger supermarket .
b)
To Reconfigure Retail Shop Level 2
A lot of retail shop lot sizes in KPBPG measures more than 1000sq ft whereby it’s not in the best use in term to generate higher rental rate. In order to get good rental rates, new layout and shop sizes should be reduced. Existing shop lots in KPBPG having a total number of 189 units . After reconfigure the total number of shop lots will increase to 233 lots. Level 2 will be divided into 2 areas which is under food court and bowling alley/amusement centre. The designed for the food court need improvement from the current uniform lighting, standardized tables and chairs which is contradict with the modern concept. Shoppers normally wants food courts and common areas that feel cosier and more welcoming, where they wouldn’t mind lingering with a cup of coffee. Walls, furniture and strategically chosen the lighting work together to enhance the spaces. Existing lot, amusement centre also will be converted into smaller retail lots, Bowling alley and small size of amusement centre to gain more useable retail spaces and generate income to the complex. Plan overleaf shows the comparison between existing layout with future layout.
Picture 10 : Existing view of the Food Court
Picture 11 : Existing tenanted area – Amusement Center to be converted into smaller lots and bowling alley
Picture 12 : Existing Layout Plan of KPBPG (Level 2)
4.1.3 a)
Level 3 Refurbishment Reconfigure Retail Shop Level 3
Existing retail shops at Level 3 stand at 42 units which cater for f& b and consumer items. Plans are made to reconfigure and rearrange the retail shops into two main sections. Retail shop at level 3 ( ex cinema lots ) will be converted into smaller lots to generate more income to the complex. It will increase and able to provide up to 99 shop lots. Retail lot at level 3 (dewan area) will also converted into smaller lots . Existing lots on Level 3 are currently occupied by UO Superstore and previous Majlis Perbandaran Pasir Gudang (MPPG) administration office together with the public library will be converted to accommodate new Cineplex’s. Table 6 : Resize of Retail Shops at Level 3
Nos
Retail Lot
1 2 3
Ex Cinema Dewan L3-2/3
Area (sq ft) 4,809 4,809 5,085
Sub-divided Lot (Nos) 30 24 5
Picture 15 : Existing Layout Plan of KPBPG (Level 3)
Picture 16 : Proposed New Layout Plan Of KPBPG (Level 3)
b)
Industrial Supplies Centre
4.1.4 Repainting Works Pasir Gudang is a well-known industrial town and home to various local and international companies. The proposed strategy will turn a specific part of KPBPG into an industrial retail supplies center. This new addition of trade will enable KPBPG to attract established Industrial Retail Suppliers and become one of its pulling factors. It is another competitive edge since retail category for industrial supplier center has not been created before to complement the huge industrial area located nearby. Existing Atrium on Level 3 will be transformed to accommodate industrial retail outlets offering the following : i. ii. iii. iv. v. vi. vii.
Hardware/working tools Industrial glove, uniform Lubricant, additives, hydraulic hose Safety equipment and devices, electronic gadgets and pumps, Industrial product display outlet Office equipment Industrial Stationeries
This new concept will reflect Pasir Gudang as industrial town especially to cater the need of industries in Pasir Gudang i.e. oil & gas, wire & steel manufacturing, shipping , logistics and bio-based technologies and etc.
Northern portion of the building (facing Menara Aqabah) has been recently painted with new coat of colour paint and enhance the beauty of the complex. The rest of the building needs to be repainted to standardize the exterior facade of the building
4.2
Create More Parking Bays
4.2.1 To create more parking lots Parking lots is very important to the shopping complex in order to provide the facilities to the shoppers. Any consideration of the total parking complex within shopping centre must include of analysis of several factors which directly or indirectly contribute to the utilization and subsequent success of the complex .Indirectly its help tenants to achieve sales. Current scenario parking bays in KPBPG is not enough to accommodate the shoppers. Table 5 shows the ratio analysis numbers of parking bays available for each shopping complex every 1000 square feet lettable area.
No
1 2 3 4 5
Centres
Tesco Sri Alam Kipmart Masai Today’s Market Econ Save Masai KPBPG
Lettable Area Number Of Ratio : parking (sq ft) Parking bays bay/1000sq ft 250,000 560 2.2 120,800
330
2.7
155,000
380
2.4
56,000
200
3.5
265,000 KPBPG After Reposition
380 590
1.4
2.2
Table 5 : Ratio of Parking Bay Vs Lettable Area
Based on the table, it shows that the ratio of parking bay every each 1000 square feet lettable area for the KPBPG is only can provide 1.4 bay. Sufficient and convenient parking area will give a good impact to the shoppers. New arrangement of parking area will increase the parking bays from 380 bays to 590 bays and increase ratio to 2.2. Existing lots bowling and furniture store will be converted into parking area to accommodate more parking bays.
4.3. Proposed New Organisation Chart Staff function is very important roles In order to maximize the revenue of the complex. New positioning of staff function has been planned as shown below : -
CENTRE MANAGER YAKOP
Fit-Out Vacant
OPERATION MANAGER (Engineer) Vacant
TENANCY MANAGER Ghafizah Hanim
ADMIN/FINANCE MANAGER Amirudin
COMMUNICATIONS MANAGER Yusree
Teraju Fokus Sdn Bhd
Supervisor Zain Hashim
Retail Vacant
Anchor/Mini Anchor
Vacant
Pembantu Tadbir Kanan Marwiah
Food Court Vacant
Kerani Vacant
ADMIN
Advertising & Promotion Shafie
Kiosk/PS Vacant
DJ 1 Vacant
Pem Tadbir Jun
Asst n Promotio n Vacant
Kerani /Recept Shaldah
FINANCE
Pen Akauntan Nurul
TMR Urusharta (M) Sdn Bhd Rent Coll Vacant
HC Duraclean Sdn Bhd
Metro Parking (M) Sdn Bhd
Cashier Azida
•
•
•
Maintaining an ad schedule: working in liaison with branding/design colleague, ad production house and media buying agency to monitor material deadlines, arrange artwork production, and submit artwork on time Collaborates with a wide variety of functional areas such as sales, editorial, marketing, design, and operations to execute specific marketing plans for each assigned title Execute plans/activities within allocated brand advertising and promotion budget, including detailed tracking of all expenses.
ii) MARKETING EXECUTIVE Responsibilities: • • •
•
Job function as per requirement are as follows : i) EXECUTIVE ADVERTISING & PROMOTION Responsibilities: •
•
Assist in planning and executing effective advertising and branding activities to pro-actively manage the Company’s corporate and brand image which include the following activities: Assist in conceptualization, development and execution of marketing communication activities such as tourist programs, hotel tie up, advertising strategies, website, newsletter etc.
Create and execute marketing plan; Develop plans, special activities and promotions; Work closely with subordinate in coordinating/compilation of data base of prospect tenant; Conduct market research/ analysis/update information to keep abreast with latest market trend;
iii)LEASING EXECUTIVE Responsibilities: •
•
•
•
Assist in sourcing and securing tenants for the shopping mall to meet leasing targets Attend to leasing enquiries and compile information from potential retailers Ensure that tenants are consistent with the retail plan and the positioning of the shopping mall Ensure that all leasing documentation are in good order
•
Conduct ongoing market research to keep abreast with the current leasing trend
•
•
•
iv) •
•
•
TENANCY ADMIN
Liaise with tenants and solicitors to advise and co-ordinate all tenancy related issues Prepare and follow-up on all documentations in relation to tenancy matters, including tenancy agreements, licence agreements and such other agreement as required Assist in ad-hoc assignments as and when required.
v)
•
•
•
•
Liaise with auditors/tax agent regarding financial statement, tax computation auditing of account; Maintain proper records of company financial transactions; Monitor company cash flow position – uplift & placement of FD at the best rate, interest collection etc; Responsible for safe keeping all tender document, title deeds, cheque books, agreement & share certificate; Check bank account reconciliations against bank statement; Reconciliation of tenants security account & utility deposits received against the security & utility deposits as stated in the tenancy agreements, attends to tenants enquiries regarding the refund of security deposit etc Closing account system for each financial year and to ensure all reports are printed and properly filed.
ACCOUNT ASSISTANT
Responsibilities: •
•
•
•
•
•
•
Preparation of payments & petty cash Data-entries into system of AR, AP, GL, PM and/or fixed asset Fixed asset maintenance Assist in GL preparation Assist in P&L, Balance Sheet & tax preparation Generation of service tax billings & collection Any other task or assignments as required
vi)
ACCOUNTANT
Responsibilities: •
•
•
Prepare and coordinate with accounts team in relation to preparing management accounts, budget, cash flow, forecast and projection Monitor and remind related departments the relevant payment due dates e.g corporate tax, payment, RC payment, quit rent, assessment etc Coordinate with auditors, store keeper & stock take, stock variance report and proceed to investigate discrepancies;
4.4
Facility Management Contractor
Currently facility management was out sourcing under TMR Urusharta. Proposed to have in house facility management team in order to control operation cost more efficiency. Through this system also can create teamwork spirit among staffs. In shopping mall business, normally facilities management will not be out-sourced due to the above reasons. Nearby shopping mall such as Tesco, Jusco, Giant and all Marts Concept used in house facility Management team.
List of event for year 2010 are as follows:
4.5
Marketing Strategies
Promotion is one of the important key to the shopping complex. The main objective of the promotion is to attract shoppers. Promotion strategy are not only to build image to the building but to benefit the tenant of the building as well. Proper promotion strategy will help the building to sustain revenue in long term. There are several strategies such as:
Januari – program jualan kembali ke sekolah/ Pameran pendidikaan Febuari –Anugerah Bintang popular berita harian/ pertandingan tekwondo Mac - Pertandingan Kugiran Terbuka Johor/ Karnival Telephone bimbit April -Karnival Permotoran / Kempen Sure Sihat Mei - Mewarna bersama Lion Group/ Gempak selebriti Astro Jun - Kejohanan Sepak Takraw Antarabangsa/ Expo Pendidikan & Kerjaya Julai - Kejohanan Bola Tampar Terbuka Johor/ Fiesta Pesona Pengantin Okt - Konsert tadika sekitar pasir gudang Nov - Karnival Jom Center / Expo Pelancongan cuti-cuti malaysia Disem - Gerak Usahawan Negeri Johor/ Broadband bersama TM Net
1) Advertising strategy Plan to distribute about 30, 0000 leaflets monthly on the sharing basis with tenant to promote Kompleks Pusat Bandar Pasir Gudang on the event take place as well as to promote the tenants. Plan to increase the numbers of banners & bunting to make sure shoppers aware of the building coming events and activities. Plan to distribute bundle of sms to the shoppers before incoming new event. It is important to build relationship with shoppers.
2) Events strategy Plan to generate events for every two weeks. Event s is important to built interest to shoppers to come to the building.
5.0 FINANCIAL 1) Budgeted Profit and Loss Expected Revenue
3) Promotion area Income can be generated from non letable area by turn it to the promotion area. Tenant can rent the promotion area at the promotion rate as well as we can generate income from it.
Revenue for year 2010 will be expected at RM 5.08 million which is decrease 9.99% (RM564, 038) from 2010 budget. No increment in rental rate due to economic decease during the year. On the other hand expected expenditure for year 2010 will be reducing by RM 452,718 which is 9.50% lower than 2010 budget.
Budgeted revenue 2011 – 2012 will be expected of RM 11.5 million. Average budget for the consecutive years will be at RM 5.75 million compared to 2010 budget which is RM 5.64 million. Projection revenue for 2013-2015 will be at RM 38.58 million. Average projection of RM 12.86 million per year that would increase RM 7.22 million which is 127.9% higher compared to 2010 budget.
Budgeted Cash Inflow
Expected Gross Profit / (Loss)
Cash inflow for 2013-2015 will be projection at RM 34.79 million with average of RM 11.60 million. Increasing of RM 6,240,073 compared to 2010 budget.
Gross profit for year 2010 will be expected at RM 2.03 million which is increase 14.45% (RM256, 463) compared to 2010 budget which is RM1.78 million. Budgeted gross profit 2011 – 2012 will be expected RM 3.71million. Average projection for the consecutive years will be at RM 1.85 million.
Net Operating Profit Net operating profit for Ko mplex Pusat Bandar Pasir Gudang for 2010 will be expected at RM 768,158 compared to 2010 budget which is at RM 879,479. Decreasing in profit RM 111,320 which is 12.66% lower compared to 2010 budget that had been contributed by maintaining the rental rate. However it shows incremental of RM 200,169 compared to 2009.
Budgeted cash inflow for 2010 will be expected of RM 5,357,391 increase by RM 668,515 which is 14.26% higher compared to 2009 budget of RM 4,688,876. Average Inflow throughout 2011-2012 will be RM 5.2 million.
Budgeted Net Cash Flow Budgeted net cash Flow for 2010 will be expected of RM 732,834 decrease by RM 641,648 which is 46.68% compared to 2009 which is RM 1,805,725. Projection Cash inflow throughout 2013 – 2015 will be expected at RM 18,003,576 and would be RM 6,001,192 in average.
Budgeted net operating profit 2011 and 2012 will be expected of RM 1.6 million. Average projection for the consecutive years will be at RM 0.8 million compared to 2010 budget.
Projection 2013-2015 Projection net operating profit for 2013-2015 will be increase of RM 6,374,443 which is 724.8% higher compared to 2010 budget. Yield of Kompleks Pusat Bandar Pasir Gudang will be increased from 1.4% i n 2010 to 1.53% in 2012. However yield for 2015 will be projection at 12.14%.
2) Budgeted Cash Flow
6.0
CONCLUSION
It is vital for KPBPG to turnaround itself to be the preferred destination in Pasir Gudang. This turnaround strategy once completed, KPBPG will be able to cater the need of day time employees as well as the growing families in Pasir Gudang
This exercise is targeted to attract a substantial number of shoppers thus generate more income to the complex and consequently be able to make installment payment to MPPG for the coming years. KPBPG exercise will be carried out progressively in stages and expected to commence in year 2012 The budget for the upgrading is estimated to be at the cost of RM18 million.
1.
OMPLEKS PUSAT BANDAR PASIR GUDANG URN AROUND STRATEGIES
2. 3.
TABLE OF CONTENTS P a g e
4. 5. 6.
INTRODUCI ON 1 OBJECTIVE 1 SWOT 2 STRATEGY 4 FINANCIAL 19 CONCLUSION 20
ANALYSIS
Appendix Appendix 1 :
Financial projection
