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Wednesday, September 3, 2008

CapitaLand may delay REIT launch in Malaysia

SINGAPORE: CapitaLand Ltd, Southeast Asia's largest real estate player, may delay the launch of its retail property trust in Malaysia if market condition worsens over the next few months.

The Singapore-based group plans to launch a real estate investment trust (REIT), worth in excess of RM2 billion, by the end of this year or early next year.

It will include Sg Wang Plaza in Kuala Lumpur, Gurney Plaza in Penang and Mines Shopping Fair in Seri Kembangan, Selangor.

President and chief executive officer Liew Mun Leong said it will "pull the trigger" when the market permits.

"Real estate is a function of economic growth. Right now, we are targeting to get approval for the REIT by the fourth quarter of 2008. If the market weakens, we may delay the launch," he said at a media briefing in Singapore yesterday.

In addition, CapitaLand will invest the proceeds from the sale of its 30 per cent stake in Menara Citibank in Kuala Lumpur by buying more properties in Malaysia.

It may also build new malls and buildings, but Liew declined to say if the properties will be injected into the REIT later.

"We have asset allocation plan which is to invest now. So when we sell Menara Citibank, we will invest in new projects in Malaysia," he said.

Liew said CapitaLand will look for properties within its five strategic business units - residential; commercial; retail/financial; integrated leisure, entertainment and conventions; and The Ascott Group.

"When we build our retail portfolio and have promising returns, we will inject into the REIT. We will rejuvenate existing malls for higher yields so the REIT could absorb it," he said.

By New Straits Times (by Sharen Kaur)

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