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Friday, March 13, 2009

Mixed views on Glomac sale

PETALING JAYA: The real estate fraternity has mixed views about the price tags of RM30mil and RM25mil that Glomac Bhd is asking for its Kelana Business Centre and Glomac Business Centre respectively.

A valuer said it seemed to be comparatively higher than the ones sold earlier which were on a strata basis.

Two agents said the prices were not high.Glomac had, in February, said it was putting up for sale the two business centres located in Kelana Jaya to increase its war chest to prepare the company in the event the economy took a turn for the worst.

Kelana Business Centre

About a month ago, it announced that it had sold its 12-storey Wisma Glomac 3, also in Kelana Jaya where it is headquartered, to Perbadanan Nasional Bhd (PNS) for RM50mil. It is now a tenant in the building.

Group executive vice-chairman Datuk Richard Fong said: “We would like to strengthen our cash position in light of the current economic scenario and to make the necessary preparations for the future.

“We also want to improve our balance sheet. In these bad times, we should be selling whatever we have that is not productive. People may read negatively into this but in these recessionary times, it is best to have as much as you can.”

Glomac’s total bank borrowings have reached RM311mil.

Fong said the company had held on to Kelana Business Centre and Glomac Business Centre for 12 to 13 years.

The rental yields from both are about 7.5% annually.

At RM25mil and RM30mil, a source said, the price would work out to RM265 and RM270 per sq ft respectively.

Another source said there might be a premium because maintenance and control would be in the hands of the landlord.

Rentals payable could be relatively higher as some units might be upgraded from the standard lots, and there might also be provision for centralised air conditioning, he said.

He also said that rentals would remain stable for now but might be pressured downwards when new stocks were added to the market.

Oasis from the Sime Darby Brunsfield group, Symphony House from the PuncakDana Group and new buildings from the Titijaya and Empire Groups in Subang Jaya will be added to the market this year and next.

The Glomac Business Centre has 300 to 350 parking bays while the Kelana Business Centre has over 400. Both are quite well-tenanted.

Glomac may move to the 15-storey Glomac Tower located next to Taman Tun Dr Ismail, which it is building.

Glomac Tower is part of an RM800mil mixed development, Glomac Damansara, which sits on seven acres.

Besides letting go of its assets, the company will continue to launch its projects, though in smaller blocks.

It has projects in Sg Buloh, Johor Baru and Rawang. Instead of double-storey terrace housing, it may also opt to change that to single-storey housing.

As for Glomac Damansara, which it plans to launch in about two weeks, the company will be offering competitive rates.

The offer includes a 10% downpayment and 90% financing.

By The Star

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