- POSTED: 12 May 2014 23:41
- UPDATED: 12 May 2014 23:53
Luxury property developer KOP is changing its strategy to focus on building mixed-use entertainment centres.
SINGAPORE: Luxury property developer KOP is perhaps best known for its Hamilton Scotts condominium, where a unit sold for as much as S$24 million.
It was also responsible for developing the Montigo resorts in Bali and Batam.
But the firm is changing its strategy to focus on building mixed-use entertainment centres.
Amid sluggish demand in the high-end property market, KOP said it is now seeing better prospects in a sector it calls "entertainment real estate".
Ong Chih Ching, group CEO of KOP Limited, said: "We think that the world is slightly anti-elitist right now. So as a company, we need to focus and look at what is next. And when we studied the market, we realised that we should go for consumer-type real estate.
“I think that entertainment real estate is not something that a lot of the traditional developers have actually looked at, and that's why we think this is a good opportunity for us to enter."
KOP said it may derive ticketing or food and beverage sales from these entertainment venues.
In addition, given the rising popularity of online shopping, KOP said there is a need to give consumers a greater reason to leave their homes - be it for a concert, or for other forms of entertainment.
Ms Ong added: "There is a lot of online retail (these days), so that also will be a challenge, in terms of footfall and traffic to the malls."
Speaking to reporters ahead of its listing on the Catalist board of the Singapore Exchange on Monday, KOP said its first project in the area of "entertainment real estate" will come in the form of an indoor winter resort in Shanghai, China.
The S$2.8-billion development, named Winterland Shanghai, will also have hospitality, residential and commercial property elements in its mix.
KOP said the concept of "entertainment real estate" is not new.
An example is US company AEG, which owns sports venues like the Staples Centre - which is best known for being the home of the Los Angeles Lakers basketball team.
Still, analysts warned that the firm may be wading into unfamiliar territory.
Roger Tan, CEO of Voyage Research, said: "The high-end property market in Singapore is being hurt by a lot of government controls. So I think they are potentially using this new strategy to differentiate themselves from the rest.
“But to me, if you were to do this, you're going into untested ground, and when you go into untested ground, though you may be able to generate new revenue sources from the property development, there are a lot of unknowns and question marks with regards to how well it's going to work."
KOP's shares will start trading Wednesday morning.
The firm listed via reverse takeover of Scorpio East, a film distributor and concert organiser.
KOP said it opted to list via reverse takeover because it believes that Scorpio East's expertise will help it produce entertainment content or secure the partnerships it needs for its "entertainment real estate" business.