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Tuesday, October 7, 2008

CapitaLand may add assets in Malaysia

Sources say talks to purchase 3 shopping complexes in Malaysia have reached an advanced stage

CAPITALAND Ltd, Southeast Asia's largest real estate player, is said to be in talks to purchase three shopping complexes: Ipoh Parade in Perak, Klang Parade in Selangor and Seremban Parade in Negri Sembilan.

If the acquisitions go through, they will add to its portfolio of three retail properties in Malaysia, in line with its plans to set up a retail real estate investment trust (REIT) worth over RM2 billion.

Sources told Business Times that the negotiations between CapitaLand and TMW Asia Property Fund GmbH & Co, which owns the shopping complexes, are at an advanced stage.

Based on the property valuations undertaken in early 2004, CapitaLand could pay some RM500 million for the shopping complexes.

At press time, Business Times did not receive a response from either CapitaLand Ltd president and chief executive officer Liew Mun Leong or CapitaLand Retail Ltd chief executive officer Pua Seck Guan on the said negotiations and whether it planned to buy any or all three properties.

TMW Asia Property Fund, a German property fund, bought the three properties - under the operating companies Lion Klang Parade Sdn Bhd, Lion Seremban Parade Sdn Bhd and Lion Ipoh Parade Sdn Bhd - for RM340 million in 2005 from the Lion group.

In 2004, Klang Parade was valued at RM179 million, Ipoh Parade at RM188 million and Seremban Parade at RM90 million.

The fund is managed by Pramerica, the real estate investment management business of Prudential Financial, Inc from the US.

CapitaLand has been on a shopping spree in the past couple of years. It has in its stable the Sungei Wang Plaza in Kuala Lumpur, Gurney Plaza in Penang and Mines Shopping Fair in Seri Kembangan, Selangor.

According to previous reports, Seremban Parade has a nett lettable area of 316,847 sq ft and sits on 1.97ha; Ipoh Parade has a nett lettable area of 594,414 sq ft on 4.14ha; and Klang Parade has 696,045 sq ft space.

It was recently reported that CapitaLand Ltd might delay the launch of its retail property trust in Malaysia if market conditions worsened over the next few months.

Last month, CapitaLand said that it aimed to get approval for the REIT by the year-end.

By New Straits Times (by Vasantha Ganesan)

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