The abandoned five-storey Waterfront City (also known as Lot 1) mall on Persiaran Tun Sri Lanang, off Jalan Skudai, could be saved by a white knight given its prime location overlooking the Straits of Johor and across Singapore.
According to Samual Tan, executive head of KGV International Property Consultants, with the reopening of the borders between Singapore and Johor Bharu, more investors are interested in redeveloping such sites.
However, several aspects must be considered to attract them, including the ease of acquisition, he told NST Property.
"This is a stratified building where lots are sold to individual buyers and it is an ardous task to have a bulk purchase. We managed to do it but a lot of effort was put in. It is presently an eyesore, particularly given its proximity to the Causeway and location in the city centre. The prices must be right (to attract investors).
"The authorities must make the transaction easier and cheaper. One of the methods is to compulsorily acquire the property and then sell it to the developer. The plot ratio should be increased. The approval process should be faster. The assessment and quit rent should be reviewed. Old debts to the authorities should be waived," he said.
The Lot 1 mall was constructed for more than RM100 million in 2000 as part of the Johor Bahru Waterfront City floating project.
The RM6 billion project, which was intended to consist of 10 parcels, was launched in 1996.
Office blocks, condominiums, and a hotel were planned for the 2.5km seafront, but no other development took place except for the construction of Lot 1.
The state decided to abandon the floating city project in 2003 due to environmental concerns, as well as an economic downturn.
There were proposals to redevelop the complex, but they were never realised.
Only the open car park area is used to warehouse repossessed vehicles recovered by the Johor Bahru City Council (MBJB).
Transbay Ventures Sdn Bhd, a 70:30 joint venture between Pilecon Engineering Bhd and the Johor state government, built the Lot 1 mall.
On January 27, 2006, the Kuala Lumpur High Court granted an order to liquidate the company on Jan 27, 2006.
The mall has 350 units and a net retail space of 380,000 square feet. It closed down in 2003 after operating for three years.
Tan was influential in selling a portion of the mall to a Middle-Eastern group in 2008, but the transaction was aborted due to the Lehman Brothers crisis.
"The price was too good at the time, but unfortunately the Lehman Brothers crisis occurred," he explained.
Tan was also a member of a committee formed by the MBJB to submit ideas for revitalising the JB city project.
One of the suggestions is to buy the property and repurpose it for a better cause.
He said that there were plans to redevelop the complex but that they were never carried out for a variety of reasons.
"First and foremost, the economy and real estate market were in decline. There were also numerous demonstrations from non-governmental organisations (NGOs) which were against any waterfront development. This may deter some developers because it will draw negative notice. Finding the appropriate anchor tenant may be another issue," he said.
The Johor state government reportedly has no intentions to revive the property.
Johor housing and local government executive councilor Datuk Jafni Md Shukor recently explained to the state assembly that, while the mall's location has great economic potential, the building's owner has yet to present their plans to MBJB.
"Until now, we have not received any recommendations from the owner to revive Lot 1 Waterfront City. Nevertheless, the building has great potential to improve the image of the Ibrahim International Business District (IIBD), given its strategic location in the city," Jafni said.
The state government said it would be difficult to take over the land via forfeiture, as the building is owned by Transbay Ventures.
"In the event, the property is seized by the state government, all unit owners would lose their respective strata titles. Following Article 13 of the federal constitution, no person may lose their ownership rights unless done according to law and the owner is compensated appropriately," he added.
The 250-acre IIBD is a transformation plan developed by Johor Corporation (JCorp) to turn Johor Bahru into a "metropolis of international standard". JCorp is the state investment corporation of the Johor government.
Coronation Square, the first project under IIBD, which has a GDV of RM3 billion, is scheduled for completion in nine to 10 years. It will comprise a hotel, a hotel with residences, an office, medical suites high-rise, serviced apartment towers, and a mall.