Tan to sell 70% of Berjaya GMOC to Carnival Group

KUALA LUMPUR: Tan Sri Vincent Tan’s business units are collectively selling a 70% stake in Berjaya (China) Great Mall Co Ltd (GMOC) to Hong Kong-listed Carnival Group for a price that is yet to be negotiated. GMOC, which has a fully paid-up capital of US$185.51 million (RM589 million), is undertaking a massive project to build the world’s largest shopping mall in the Hebei province. In an announcement to Bursa Malaysia, Berjaya Land Bhd said its wholly-owned subsidiary Berjaya Leisure (Cayman) Ltd (BCayman) will sell 35.7% of GMOC to Carnival Group or a relevant affiliate. BCayman presently has a 51% stake in GMOC. Meanwhile, Berjaya Times Square (Cayman) Ltd (BTS-Cayman), which currently holds a 49% stake, will also sell a 14.3% stake in GMOC. Tan holds an 80% stake in BTS-Cayman, while his son Rayvin holds the remaining 20% stake. This confirmed a January report by The Edge, quoting sources, that Tan was looking for ways to raise cash to build the Great Mall of China, which had fallen behind schedule. The proposed methods also included finding a new investor to take up a stake in GMOC. “The MoU (memorandum of understanding) provides for satisfactory due diligence investigation to be conducted by Carnival Group within a period of 40 days. The parties agree to negotiate in good faith to enter into a sale and purchase agreement for the proposals no later than 30 days after the expiry of the due diligence period or a later date as may be mutually agreed,” said Berjaya Land in the filing. The company said the consideration for the share sale will be subject to negotiations between the parties with reference to, among other things, the results of the due diligence investigation and an independent valuation on GMOC to be engaged by Carnival Group at its own costs and expenses. Listed in Hong Kong, Carnival Group and its subsidiaries and affiliates are mainly involved in theme-based leisure and consumption business, said Berjaya Land. The former develops and operates integrated large-scale tourist complex projects, which include theme parks, hotels and shopping malls. The Great Mall of China is an ambitious plan set forth by Tan. When he announced the development of the shopping mall sometime in 2012, he said it will cover 18.5 million sq ft, which will easily dislodge the 12.5 million sq ft Dubai Mall as the world’s largest shopping mall by a comfortable margin. The first phase of The Great Mall of China was scheduled to be completed in October last year, but as at January 2014, according to The Edge’s report, citing sources, it was only one-sixth completed. The delay was because GMOC has utilised a significant amount of its capital to build the first phase. Phase one was intended to be financed through GMOC’s paid-up capital and the sale of retail space. However, as at April 2012, GMOC was reported to have burnt through half its paid-up capital. Because of the delay, there has been no revenue from the sale of retail space as envisaged, which explains why Tan is looking for a fresh capital injection for the project. The first phase is planned to offer one million sq ft of retail space, a one million sq ft pedestrian mall, an extreme park, a water park and a family park. The entire project was initially slated for completion in 2017. This article first appeared in The Edge Financial Daily, on September 3, 2014.

 

Citigroup pays record US$697m for Hong Kong tower

HONG KONG: Citigroup Inc paid a record HK$5.4 billion (US$697 million or RM2.25 billion) to a unit of Wheelock & Co for a Hong Kong office tower that will bring most of its 5,000 employees in the city under one roof.

The price for the 512,000 sq ft property in the Kowloon East district is the largest ever office transaction in Hong Kong, the New York-based bank said in a statement on Tuesday. The tower, scheduled for completion by the end of 2015, will be used to house staff currently spread out across offices in the city, said Weber Lo, the bank’s chief executive officer for Hong Kong and Macau.

Citigroup’s purchase may mark a return of investment demand in Hong Kong’s office market as falling vacancies and high rents pose a challenge for companies seeking large office spaces. Banks and insurers, including Agricultural Bank of China Ltd and Manulife Financial Corp, have bought buildings in the city, which is home to the highest office rents in the world after London, according to property broker Cushman & Wakefield Inc.

“The lack of supply in Hong Kong has been a challenge for many large occupiers, such as Citi, who are in Hong Kong for the long term,” said Sigrid Zialcita, managing director of research for Asia-Pacific at Cushman & Wakefield in Singapore. “Hong Kong has not lost its lustre as a regional financial hub, even with competition from Singapore and Shanghai.”

The overall vacancy rate in Hong Kong fell for a second consecutive quarter in the first three months this year, to 3.6%, according to CBRE Group Inc, which advised on the transaction. Office rents in Central may drop as much as 5% this year on increased demand from mainland Chinese firms and an improved economic outlook, the realtor said.

Citigroup is paying about 20% more for the Kowloon tower than Manulife, which paid HK$4.5 billion last year to Wheelock for a similar-sized block at the same development, called One Bay East. The waterfront district where the two towers are located, formerly an industrial zone, is earmarked by the Hong Kong government as an alternative financial hub.

“There aren’t many banks historically that have bought their real estate,” said Ben Dickinson, head of Hong Kong markets at broker Jones Lang LaSalle Inc. “Most banks in Hong Kong prefer to retain the flexibility leasehold occupation offers them. It’s going to be interesting to see if it changes the perception for occupiers in Hong Kong whether more people will look at purchase.”

Hong Kong is one of the eight markets in Asia where the bank generates more than US$1 billion of revenue annually and has close to 5,000 employees, Citigroup spokesman James Griffiths said.

The purchase “underlines our belief and confidence in Hong Kong’s continued growth as a leading global financial centre and hub for some of our core regional businesses,” Stephen Bird, Citigroup’s Asia-Pacific chief executive officer, said in Tuesday’s statement. — Bloomberg


This article first appeared in The Edge Financial Daily, on June 19, 2014.



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PJD to acquire Melbourne land for A$145m

KUALA LUMPUR: PJ Development Holdings Bhd (PJD), through its 75%-owned subsidiary Yarra Park City Pte Ltd, has entered into a put and call option deed with an Australian developer for the purchase of a piece of freehold land measuring 2.026ha in Southbank, Melbourne for A$145 million (RM439.8 million) cash. The proposed transaction works out to RM2,013 per sq ft. In a filing with Bursa Malaysia, PJD said the land, to be purchased from developer Dynasty Falls Pte Ltd, is located in the inner urban central business district (CBD), which houses many offices of major corporations, high-rise developments and landmark buildings such as the Melbourne Convention and Exhibition Centre, and Melbourne’s tallest building — Eureka Tower. PJD said in a statement that it deems the acquisition to be ideal for long-term development with strong growth potential, given that it is one of the last pieces of sizeable prime land available for development in the Melbourne CBD. The basis of deriving the purchase price, said PJD, is on a willing buyer, willing seller basis, premised on the strategic location of the property, best estimate of the indicative market value and comparison of recently transacted prices of properties located within the vicinity. “A formal valuation is currently being carried out, details of which will be disclosed upon signing of the contract of sale of real estate,” it said, adding that the estimated time frame for completion is expected to take effect in July 2014. However, PJD didn’t say how it would fund the acquisition that seems to be a major exercise for the group. PJD had net total borrowings of RM328 million as at March 31, 2014, against shareholders’ fund of almost RM1 billion. The group reported a net profit of RM75.9 million for the nine-month period ended March 31, on revenue of RM705.5 million. Nevertheless, there has been speculation that PJD may embark on a corporate exercise to raise funds or to be merged with OSK Property Holdings Bhd to form a bigger entity. Both property development outfits are controlled by veteran investment banker Tan Sri Ong Leong Huat who holds 26.8% and 70% stakes in the companies respectively. This article first appeared in The Edge Financial Daily, on June 20, 2014. For more information on Building and Construction seminars, please visit www.asiapacificevents.com

Good variety of offerings at property fair

Value for money: Halimah, accompanied by Star Publications group managing director/CEO Datuk Seri Wong Chun Wai (left) and Yam (second from left), visiting the Mah Sing booth after launching StarProperty Fair 2014 at Setia City Convention Centre.

SHAH ALAM: Potential house buyers are spoilt for choice with the variety of properties on display at the popular StarProperty Fair 2014.

The three-day event features the country’s top property developers and their latest projects, suitable for both first-time buyers or investors.

Mah Sing Group Bhd corporate communications general manager Lyanna Tew said the company had seven projects at the fair with a good variety of offerings to meet different market needs.

The spotlight, however, is on a mixed ­development project called Lakeville Residence in Taman Wahyu, which is currently open for registration. The project boasts a spectacular lake view, mountain view and Kuala Lumpur city view and comes partially furnished with two car parks.

Other Mah Sing projects available at the fair include four landed residential projects in Rawang and Cyberjaya as well as two high-rise projects in Mont Kiara and Jalan Ampang.

Even though it is the new kid on the block, Eco World Development Sdn Bhd does not fall behind its veteran peers as it has eight projects on display at the fair.

“We are showcasing projects from Penang, the Klang Valley and Johor,” said Yuen Chee Meng, EcoWorld’s senior manager for corporate marketing.

The fair, featuring 28 exhibitors, ends this Sunday at Setia City Convention Centre. It opens from 11am to 7pm.

Visitors stand a chance to win 50 units of Sam­sung Galaxy Tab 3 Lite as part of a lucky draw contest in partnership with CIMB Property Mart.

StarProperty Fair 2014 is organised by StarProperty.my.

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S P Setia’s bid for Bangsar land turns unconditional

KUALA LUMPUR: S P Setia Bhd said the privatisation agreement between its 50%-owned unit Setia Federal Hill Sdn Bhd (formerly Sentosa Jitra Sdn Bhd), the government and Syarikat Tanah dan Harta Sdn Bhd has become unconditional. This brings the property developer closer to acquiring the 51.568 acres (20.86ha) of land in Jalan Bangsar here, in exchange for the development of a RM845 million integrated health and research institute, 1NIH Complex, on a 41.115-acre piece of land located in S P Setia’s Setia Alam township in Shah Alam, Selangor. In a filing with Bursa Malaysia yesterday, S P Setia said the Health Ministry was satisfied that the conditions set out in the privatisation agreement had been fulfilled and that the effective date of the privatisation agreement had been determined to be June 17. The agreement dates back to a 2011 proposal in which the Public Private Partnership Unit (PPPU) in the Prime Minister’s Department had granted Setia Federal Hill approval-in-principle to enter into negotiations with the PPPU and the ministry over the development of the health complex. The government’s approval-in-principle to the proposal submitted by Setia Federal Hill was subject to the transfer of the Setia Alam land to the government and the submission to the government of a letter of offer evidencing that Setia Federal Hill has secured the project financing in respect of the 1NIH Complex. Setia Federal Hill plans to redevelop the Bangsar land into an integrated mixed residential and commercial project and provide the government with a 20% share of the net profit from the redevelopment. Currently, five agencies of the National Institute of Health, which the Health Ministry is responsible for, are situated on the land. They are the NIH Secretariat, the Institute of Health Management, the Institute of Public Health, the Institute of Health System Research and the Institute for Health Behavioural Research. This article first appeared in The Edge Financial Daily, on June 20, 2014. For more information on Building and Construction seminars, please visit www.asiapacificevents.com

Eco World buys Semenyih land for RM3.5b township

KUALA LUMPUR: Eco World Development Group Bhd plans to develop a mixed residential township with a gross development value (GDV) of RM3.5 billion in Semenyih, Selangor, following the acquisition of a 492.66-acre (199.4ha) tract there.

The project will have a focus on affordable housing.

“It will complement the group’s overall master development strategy for [its current project called] EcoMajestic,” said Eco World president and chief executive officer Datuk Chang Khim Wah in a statement yesterday.

The group yesterday announced the acquisition of the Semenyih land from Univas (Far East) Sdn Bhd for RM225.33 million or RM10.50 per sq ft, as part of its plans to increase its pipeline of projects in the Klang Valley, Iskandar Malaysia and Penang to gain market share and lock in future growth.

The latest acquisition will increase the property developer’s landbank to more than 4,000 acres from 1,326.6 acres currently.

In a filing with Bursa Malaysia yesterday, Eco World said its unit Majestic Blossom Sdn Bhd had yesterday signed a conditional sale and purchase agreement (SPA) with Univas for the proposed acquisition which is expected to be completed by the fourth quarter of this year.

The SPA is conditional upon fulfilling conditions precedent within six months, including securing the approvals of the Estate Land Board for the transfer of the land, the shareholders of Eco World at an extraordinary general meeting to be convened and any relevant authorities.

“Majestic Blossom is currently in the initial stage of planning the development and it will need to submit a detailed development plan to the relevant authorities for approval,” said Eco World.

“It is now too preliminary to ascertain the total development costs, timing of development, expected profits as well as the additional financial commitment required for the project pending submission of the development plan for approval by the authorities,” it added.

The group expects to finance the proposed acquisition via internal funds and/or bank borrowings.

The freehold tract is located between the towns of Semenyih and Broga, and is within close proximity to the 1,073-acre EcoMajestic — Eco World’s first township project in the Klang Valley.

Chang said the group was encouraged by the response to its recently launched EcoMajestic, which saw a take-up of 95% for the first phase of 612 units of 2-storey terraced houses.

“This latest acquisition will increase our landbank in Semenyih to some 1,500 acres. With two sizeable projects in this fast-growing development corridor, Eco World is well-positioned to serve a broad range of customers and we intend to come up with exciting and innovative product offerings that will appeal strongly to the mass, upgrader and luxury home market,” said Chang.

“Given the location, there is good potential for upgraders and overspill demand to be captured from older neighbouring townships such as Bandar Rinching, Bandar Tasik Kesuma and Bandar Sunway Semenyih. The burgeoning student population created by Nottingham University and the land’s proximity to the proposed Bandar Kajang MRT Station are also supportive factors which bode well for its development prospects,” he added.

To further enhance accessibility and improve connectivity between EcoMajestic and the Semenyih land, Eco World plans to upgrade the existing connecting roads from EcoMajestic to Bandar Tasik Kesuma, an established residential area, and the Semenyih land.

Shares in Eco World closed four sen or 0.76% higher at RM5.31 yesterday, with a market capitalisation of RM1.34 billion.

EXPANDING LAND BANK... Univas (Far East) Sdn Bhd director Tee Cheng Hua (third from left) exchanging documents with Eco World Development Group Bhd president and chief executive officer Datuk Chang Khim Wah after the signing of a sale and purchase agreement yesterday for the acquisition of a 492-acre tract in Semenyih, Selangor by Eco World from Univas. Looking on are  Eco World director Tan Sri Liew Kee Sin (centre), executive director Liew Tian Xiong (right), Univas representative Jane Tee (left) and director Tee Lip Sin

 

This article first appeared in The Edge Financial Daily, on July 3, 2014.

Princess Cove set to be Johor Baru’s latest landmark

JOHOR BARU: The sprawling Princess Cove project in Tanjung Puteri by China-based property developer R&F Properties Co Ltd is expected to become the latest landmark in Johor Baru.

The project is located opposite Singapore’s Woodlands immigration complex and next to the Johor Causeway.

“It will be a new landmark in Johor Baru, similar to what Kuala Lumpur has in the Petronas Twin Towers, and will greet those who are coming to Johor via the Causeway,” R&F Properties sales representative Joe Tan said during a tour of the project’s yet-to-be officially launched sales gallery yesterday.

Tan said the new landmark will comprise twin skyscrapers, one of which will be a Grade A office tower while the other will house a five-star hotel. He declined to divulge further details about its height.

But several local property websites quoted the height of one of the skyscrapers at over 550m.

Tan said for the first phase, which is slated for completion in 2017, the developer will build 3,000 units of luxury condominiums in 15 blocks and a three-storey shopping complex.

“We already have enquiries from customers from the United States and Britain,” he said, adding that the project, targeted for Malaysian and foreign buyers, will be completed in five phases spanning eight years.

R&F Properties, one of the largest property developers in China and listed on the Hong Kong Stock Exchange, late last year bought 47ha of seafront, prime land in Johor Baru worth RM4.5 billion in a deal involving Johor royalty.

The land was formerly the site of Tanjung Puteri’s Royal Malaysian Customs Department. On a per sq ft (psf) basis, the prime land is valued at more than RM890, making it the second most highly priced piece of land in the city, trailing closely behind another China-based property firm that bought 15ha of land in Danga Bay for RM991 psf. — Bernama


This article first appeared in The Edge Financial Daily, on July 3, 2014.