One may wonder how many cups of coffee does Starbucks have to sell in one day to make do with its operation expenses. This leads to the question of how much does one Starbucks Reserve outlet costs to house its sophisticated concept store.
Before we go any deeper into more serious figures, check out the infographic below and get to know what Starbucks Reserve is all about with an interesting breakdown as we play around with the numbers;
So here comes the big punch.
On 31st July 2018, Berjaya Starbucks Coffee Company (BStarbucks) entered a Sale and Purchase Agreement for the proposed acquisition of a ground-floor unit in Berjaya Times Square (adjacent to the existing Starbucks Coffee outlet) for a cash consideration of RM12,435,000 or at a whopping RM15,000 per square-foot.
This is to acquire an 829 square-foot unit meant for the latest Starbucks Reserve outlet in Malaysia from Deru Klasik Sdn. Bhd., a property investment company.
This most recent acquisition by BStarbucks valuation appraisal went up to about RM14,000 psf. to RM18,000 psf.
RM15,000 psf. commercial lot for a coffee shop in a 15-year-old mall is pretty mind-boggling. Here, we are trying to make sense of the massive price tag with a little bit of research and most of all, with our in-house property data analytic tool – Property Advisor.
Property Advisor’s Market Research
Looking at past transaction data, we discovered that some commercial lots in Berjaya Times Square do have high market value in the past 5 years. Some units in Ground Floor neighbouring Starbucks were sold at RM15,000 to RM18,000 psf. in past years.
The highest transacted price of a commercial lot in Berjaya Times Square within the past 5 years was RM35,155 psf.! The unit was purchased in January 2014 by a company dealing with property investment and rental collection.
Also, we found out that Berjaya Starbucks Coffee Company Sdn. Bhd. successfully acquired Lot G-11 in Berjaya Times Square from Deru Klasik Sdn. Bhd in 2016 for RM10,080 psf. The lot houses the current Starbucks Coffee Café & Restaurants.
For the sake of expanding the current Starbucks Coffee with a Starbucks Reserve store, the giant coffee chain seems to be willing to get the adjacent unit with a price within the high bracket. The acquisition is expected to be completed by the end of 2018.
Other Shopping Malls Nearby Berjaya Times Square
Sungei Wang Plaza is a neighbouring mall just across the road from Berjaya Times Square. Opened for business in 1977, Sungei Wang Plaza’s commercial units has a median price of RM1.5 million (RM3,320 psf). The rate of the mall’s unit could go as high as RM12,500 psf.
Meanwhile, Sungei Wang Plaza’s median rental price is RM2,375 with a median rental rate of RM4.50 psf.
Being the older and smaller competitor, Sungei Wang Plaza might not be able to surpass Berjaya Times Square but it does complement the whole shopping scene in the Golden Triangle with its budget shops; which are still popular among tourists and locals alike.
Out with the old, in with the new
On the former Pudu jail site, Eco World Development Group Bhd is currently developing the RM8.7 billion Bukit Bintang City Centre (BBCC) project. The integrated development is set to be completed in 2020.
So, with the upcoming Bukit Bintang City Centre developed just down the street, will Berjaya Times Square and Sungei Wang Plaza be able to maintain their market value from depreciating? The new BBCC Lifestyle Mall will take up a 1-million sq.ft. space – complete with entertainment hubs, 4-star hotel, strata offices and residences within its vicinity.