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Saturday, February 14, 2009

RM1.3b KL landmark

MGPA, a private equity real estate fund, is investing more than RM1.3 billion to redevelop The Intermark, formerly City Square Centre, in Kuala Lumpur.

Chief executive officer for Asia developments Michael Wilkinson said MGPA will also integrate The Intermark and Integra, more commonly known as Plaza Ampang Mall.

"The project is about reinstating the landmark in Kuala Lumpur. We have to make it a first-class asset. There aren't many office assets in the world as imposing as these," he told a news conference in Kuala Lumpur yesterday.

City Square Centre, on Jalan Tun Razak, comprised the 11-storey City Square shopping centre, the 62-storey Empire Tower office block and the 28-storey, 571-room Crown Princess Kuala Lumpur hotel.

The properties have been rebranded and are now known as the Intermark Mall, Vista Tower and Double Tree by Hilton Hotel.

MGPA's Asia Fund II bought the properties, and Plaza Ampang Mall, for RM760 million from a Malaysian developer in 2007.

Integra is a "Grade A" 30-storey office building, which will be ready by end-2012.

Wilkinson said Vista, the first component of the redevelopment, will feature a grand double-height lobby, high-speed lifts and security access control when ready by the end of this year.

Rental rates have doubled to RM9 per sq ft from RM4.60 per sq ft in the last two years.

"A third of the building is vacant for us to make way for the refurbishment. Some existing tenants may leave when their lease expires as they may not be able to afford the higher rates. We are in talks with a few multinational companies to make Vista their headquarters," Wilkinson added.

"We expect Vista to be fully leased within 12 months after its upgrading. As bad as things are globally, we are quite confident of the market and our assets. There is high demand for Grade A office buildings in Kuala Lumpur."

Wilkinson said the mall, which will offer 200,000 sq ft of retail space, and the five-star hotel will be ready by the first quarter of next year.

MGPA, an independent fund that has Australia's Macquarie Group as a shareholder, will hold The Intermark, or "integrated landmark", as a long-term investment.

By Business Times (by Sharen Kaur)

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