Singapore-based iconic mall Mustafa to expand into Malaysia

Singaporean retailer Mustafa is set to open its first departmental store in Malaysia after sealing a deal to acquire a large part of Capital City Mall in Johor Bahru. Mustafa, which is a household name in Singapore, opened its first shop in 1971 and has been operating along Syed Alwi Road since 1995. In a statement released by Capital World, it was announced that it would be selling most of the space, including rental units at its Capital City Mall in Johor Bahru, to Mustafa’s for $US86.85 million. Capital World will also be building a four-storey cold storage facility within the mall for Mustafa.

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According to the press release, the mall opened in October 2018 but has been shut since February 2020 due to financial difficulties. The mall is expected to reopen in the second half of 2023.

“Having established ourselves in Singapore as a mega one-stop retail store for everything from fast moving consumer goods to fashion, cosmetics and electronics, we believe the time is ripe for us to get into Malaysia, more so now that pandemic restrictions are out of the way,” said Mustaq Ahmad, Mustafa’s managing director. “One of our key challenges until now has been finding an appropriate site. Capital City Mall meets many of the requirements for our first flagship store in Malaysia, given its close proximity to Singapore, ample floor area and ideal floor plates.”

The purchase by Mustafa also marks the brand’s first foray as a full-fledged department store operator in Malaysia and certainly, it is a notable one for both parties. Proceeds from the sale to Mustafa will give Capital World the financial muscle to build and complete remaining components of its integrated development and give it the space to pursue other real estate opportunities, including helping Mustafa identify potential sites in Malaysia and Indonesia to further develop, according to the release.

“Having Mustafa as a key player in our integrated development is a major catalyst for Capital World as they have what it takes to run a thriving retail business given that they are a household name in Singapore. We fully expect the mall, as well as the rest of the integrated development, to be well received now that international travel has resumed. This deal with Mustafa will also fast-track Capital World’s turnaround and restore value to shareholders as we work towards getting the Company’s share trading suspension lifted,” said Hoo Khee Leng, Capital World’s CEO.

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