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Thursday, November 6, 2008

ING to pay RM328m for Menara Standard Chartered

The purchase by its Malaysian arm, ING Insurance Bhd, from Reco City Sdn Bhd is expected to be completed by year-end. Reco City is an affiliate of Singapore's GIC Real Estate Pte Ltd (GIC RE).

Business Times had earlier reported that ING was a frontrunner to buy the 45-storey building, with total tenantable area of about 345,000 sq ft.

ING Insurance president and chief executive officer Datuk Dr Nirmala Menon said that an agreement to buy the property was entered into in September.

"It is a calculated acquisition, which was made after we were satisfied with our professional consultants' due diligence reports, with relevant risk consideration and risk management done," she said.
She added that apart from capital appreciation, the building is one of the most prominent office towers in the prime commercial area of Kuala Lumpur's Golden Triangle. It would also act as a hedge against inflation.

"The company obtained approval from the Foreign Investment Committee (FIC) to acquire Menara Standard Chartered in September 2008. The purchase is scheduled to be completed before year-end," she added.

Talks surfaced recently that ING Insurance may not go ahead with the deal as parent ING Groep NV had warned that it will likely post euro500 million (RM2.27 billion) in losses, when it announces its third quarter results next week.

Last month, the Dutch government extended euro10 billion (RM45.3 billion) to ING to help reduce the financial services provider's debt equity ratio from 15 per cent to 10.

Nirmala, however, said that ING Insurance will continue to seek prime properties in Malaysia for investment.

"Our purchase of Menara Standard Chartered is our testament that ING Insurance is committed to long-term investments in the Malaysian market and we continuously seek prime investment opportunities including real estate opportunities. The total assets under (our) management currently stands at RM10 billion," she said, adding that investment is part of ING Insurance's portfolio diversification strategy for a secured and strong income stream.

Menara Standard Chartered is over 90 per cent occupied. Its main tenant is Standard Chartered Bank Malaysia.

GIC RE bought Menara Shahzan Insas in November 2001 for RM135 million. Following an extensive renovation, the building was renamed Menara Standard Chartered.

By Business Times (by Vasantha Ganesan)

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