Lion's Cheng, partners to invest RM7.7b in Dream City

The Lion Group's founder and owner, Tan Sri William Cheng, and several business partners will invest 17 billion yuan (RM7.74 billion) in a film studio and theme park in China's Yunnan province.


Private: Cheng's project doesn't involve Lion Group, say a source

"This is a private undertaking by Cheng. It doesn't involve any listed subsidiaries under The Lion Group," said a source close to Cheng.

The source also said that Cheng's business partners were not related to the listed subsidiaries or privately held companies under The Lion Group.

Bloomberg reported yesterday that the project, called Dream City, will be completed in five years and that the first phase of the project will cost three billion yuan (RM1.37 billion).

The project comprises a film studio, amusement parks, hotels, golf courses and a film school, said the report.

According to Hong Kong's The Standard online newspaper, Dream City will be equivalent to Universal Studios in the US.

It also said that Hong Kong-based film director Stanley Tong, who produced "Stone Age Warriors" and "Supercop", is involved in the Dream City project.

By New Straits Times (by Jeeva Arulampalam)

Hektar REIT eyes more mall acquisitions

KUALA LUMPUR: Hektar Asset Management Sdn Bhd is keen on more mall acquisitions for its Hektar real estate investment trust (REIT), following the acquisition of a hotel and a mall in Johor in mid-February.

The company, which manages the pure-play retail REIT, was looking at “a few more acquisitions this year,” said chief financial officer and director Zalila Mohd Toon.

“We have narrowed down a few (malls), however, we need to do more due diligence in this area,” she told The Edge in an interview recently.

“We’re looking at acquiring malls in the Peninsula and East Malaysia that fit our criteria and financial quantum,” she added.

Hektar REIT’s most recent acquisition is Wetex Parade, a property in Muar, Johor, comprising a mall of over 178,000 square feet net lettable area and a 156-room hotel for RM117.5 million.

The acquisition, which is expected to be completed in early May, will boost Hektar’s asset size by 21% to RM679 million.

The two other malls in its portfolio are neighbourhood malls Subang Parade and Melaka’s Mahkota Parade. Hektar REIT’s gearing level post Wetex Parade acquisition was 41%, Zalila said.

Zalila said Hektar REIT was also embarking on the refurbishment of Mahkota Parade and Subang Parade, with plans to start construction on the Subang Parade expansion early next year.

Commenting on the effects of the US subprime mortgage crisis and current global economic conditions on the business, Zalila was confident that neighbourhood malls would survive a recession.

“Neighbourhood malls are highly resilient to economic conditions. Consumers still flock to these malls to purchase
necessities,” she said.

“We are working hard to keep our word and give the returns to investors, we hope to increase returns to investors,” Zalila said, adding that it was confident of achieving the 2008 targets.

Hektar REIT is listed on the Main Board and has a market capitalisation of RM473.6 million. The REIT has projected a dividend per unit of 10 sen and dividend yield of 7.29% for the 2008 financial year. Its share price closed at RM1.48 on Friday.

Hektar Asset Management’s parent Hektar Klasik Sdn Bhd last month inked a joint venture with Singapore-based Frasers Centrepoint Asset Management (Malaysia) Pte Ltd (FCL), sealing FCL’s acquisition of a 40% stake in Hektar Asset Management.

By The EDGE Malaysia (by Sharmila Ganapathy)