Malaysia Star, Malaysia
By EDY SARIF
Kenanga Wholesale expects lucrative business at new centre
THE garment wholesale scene in Malaysia is still vibrant although it faces “a slight hiccup” due to the economic slowdown, said Kenanga Wholesale City Sdn Bhd group chief executive officer Yee Ia Howe.
“Business is still doing well in this area, getting busier everyday. In fact, the rental rates here have increased about 20% during this slowdown period,” he told StarBiz, referring to the garment wholesale centre in Jalan Kenanga, off Jalan Loke Yew in Kuala Lumpur.
“If you want to rent a shop here, the waiting list is two years. Even when the rental rate was increased just recently, tenants are still willing to pay to continue doing business here.
“That shows how vibrant the business is doing in this area,” Yee said, adding that rental rates there were quite competitive at about RM50 per sq ft.
The centre was established about 30 years ago for the wholesale business of clothes, fashion accessories, shoes and bags.
There are 400 shops at the Kenanga wholesale centre catering to retailers, fashion boutiques, shopping malls and the public.
Yee said about 70% of the products at the wholesale centre were for the local market and the balance exported to countries like Indonesia, the Philippines, Thailand and Brunei.
“Prices of the products here are half (of) what’s quoted in the ordinary shops or shopping malls. Here, if you want to buy clothes, you need to buy at least six pieces.
“This is what the wholesale concept is all about, buying in quantity,” Yee said, adding that all the goods were targeted at the medium and low-end market.
The bustling business at the Kenanga wholesale centre has led to parking problems, and coupled with demand for more shop lots, the owners of the centre decided to build a new 22-storey wholesale centre called Kenanga Wholesale City.
Scheduled for completion by end 2014, the project has a gross development value of RM800mil and sits on a 3.2-acre site beside the existing centre.
Demand was so good that all the units at the new centre were taken up during the groundbreaking ceremony of the development in December last year.
About 65% of the new units were taken by existing owners at the Kenanga wholesale centre and the remaining units by newcomers.
“We didn’t even advertise in any newspaper or TV to promote the new development. Yet the response was so good that we used only RM200,000 just for that event,” Yee said, adding that the company had allocated about RM8mil for advertising and promotion of the new building.
Yee said the current gloom and doom in the business world had resulted in negative sentiment, but not in the garment wholesale business, although he acknowledged that business might slow a little this year.
“We want to show people that if you have good planning, better location and good demand for your products, all these negative sentiments can be proven wrong,” he said.
Yee sees a softening of the garment wholesale market this year, but still expects the business to be profitable.
Kenanga Wholesale City offers 400,000 sq ft of total net lettable area with 1,800 parking bays.
It also has food and beverage outlets, a rooftop courtyard and a convention area for events and trade shows.
