Hatten Land, on May 5, announced that its wholly-owned subsidiary Hatten Edge has entered into a binding “phygital intelligent sports” collaboration agreement with Focus Media Sports (Shanghai).
Focus Media Sports is a subsidiary of Focus Media Information Technology, the largest commercial media group in China. Focus Media was the first Chinese advertising media company to be listed in the US in 2005. It was included in the NASDAQ 100 index in 2007.
Under the agreement, both parties have agreed to jointly invest, develop, operate and promote the experience of phygital intelligent sports in Hatten Land’s Element X mall. Hatten Edge and Focus Media Sports will invest in the project at a respective stake of 70% and 30%.
The investment funds will be used mainly for the purchase of phygital intelligent sports equipment, with the total investment being at around RMB8 million ($1.7 million).
The Element X project will be built on the fourth floor of Element X mall in Melaka with an area of around 94,381.8 sqft.
An agreed proportion of the monthly revenue, such as entry ticket sales and other relevant income of the project will be paid to Hatten Edge as rent.
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Both Hatten Edge and Focus Media Sports will form a joint management team. The team will be responsible for the daily operations of the Element X project. An agreed proportion of the monthly income of the project will be set aside for the team’s operating expenses.
The remaining profits will be distributed to Hatten Edge and Focus Media Sports at a respective proportion of 70% and 30%, in line with their stakes.
The agreement will remain effective for 10 years. The first five-year period has commenced from May 4. There will be an automatic renewal for another five years after the first five-year period.
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Upon the successful collaboration of the Element X project, both parties intend to further expand the phygital intelligent sports market in Southeast Asia and Greater China. Separate written agreements will be signed then.
The collaboration is said to contribute positively to Hatten Land’s net assets and financial performance for the financial year ending June 30, 2023.
The capital contribution by Hatten Land will be funded from proceeds raised by its share placement exercise announced in April 2022.
Dato’ Colin Tan, executive chairman and managing director of Hatten Land, says: “As a mall developer and operator, our challenge is to adapt to new trends and continue to be relevant to our targeted consumer base.”
He adds, “Uniquely positioned as a family edutainment destination at Element X with a space of more than 90,000 square feet, the Immersive Esports Hub aims to bond family members and friends together over healthy and engaging sporting activities and experiences.
“With increased footfall expected from the Immersive Esports Hub at Element X, there be more opportunities to attract more tenants and sales opportunities to Hatten’s other nearby projects. Notably, the Immersive Esports Hub also provides long-term recurring income and management income to the group,” he continues.
Li Hui, executive chairman, founder and CEO of Focus Media Sports, says: “Over the past two years, we have seen Esports and interactive sporting activities become key drivers in attracting footfall to shopping malls as families and friends bond together from such fun and entertaining activities.”
“Creating a holistic experience with digital technology, we are excited to co-invest with Hatten Land to bring our best-in-class interactive sports infrastructure to Element X and harness new opportunities in this fast growing market within Southeast Asia,” he adds.
Shares in Hatten Land closed at 3.8 cents on May 4.
