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Wednesday, September 3, 2008

CapitaLand to seize potential in real estate market

SINGAPORE: CapitaLand Ltd sees potential to expand its foothold in Malaysia’s real estate market in line with long-term plans to build its portfolio in the commercial and residential property sectors, group president and chief executive officer Liew Mun Leong said.

Liew Mun Leong

“Malaysia, which is expected to record a gross domestic product growth of 5% to 6% this year, offers good potential in both the residential and commercial property sectors.

“Through our equity stake in United Malayan Land Bhd, Quill Capita Management Sdn Bhd and Malaysia Commercial Development Fund (MCDF), we have exposure in both the residential and commercial property sectors,” Liew told Malay-sian journalists at CapitaLand’s head office yesterday.

CapitaLand is one of the largest foreign investors in Malaysia’s real estate market. Through its real estate private equity funds, Mezzo Capital Fund worth US$30.5mil and MCDF US$270mil, undertaken jointly with the Malayan Banking Bhd group, it is involved in real estate development projects in Kuala Lumpur and the Klang Valley.

Quill Capita Management, which manages the main board-listed Quill Capita Trust, is 40% owned by CapitaLand Financial Ltd through wholly owned unit CapitaLand RECM Pte Ltd, while Quill Resources Holding Sdn Bhd and Coast Capital Sdn Bhd each has a 30% stake.

In service residences, CapitaLand’s The Ascott Group owns and manages seven properties with a total of 814 units in Kuala Lumpur and Kuching.

The company plans to list its RM2bil real estate investment trust on Bursa Malaysia and hopes to receive the go-ahead from the authorities by the fourth quarter.

According to CapitaLand Retail Ltd and CapitaMall Trust Management Ltd chief executive officer Pua Seck Guan, CapitaLand is also looking to expand in Malaysia’s retail mall sector through asset acquisitions and new developments.

“We have created a strong franchise and asset management capability that will allow us to enlarge our presence in the retail malls sector in the regional and international markets.

“Malaysia’s relatively fragmented and untapped retail property sector offer much potential for CapitaLand to grow from our present three assets in Malaysia. We certainly want to grow our asset size to become one of the leading retail mall operators in Malaysia,” he said.

On the international front, Liew said CapitaLand had embarked on building integrated developments in gateway cities under the branded name Raffles City.

“We’d love to build more Raffles City integrated developments but the location must have heavy human traffic flow and a network of subways that ensures people movement.”

These integrated commercial projects incur high investment outlay or S$1bil each and the present gross development value of the six Raffles City products – four in China and one each in Singapore and Bahrain – is estimated at S$5bil.

By The Star (by Angie Ng)

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