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Tuesday, June 30, 2009

Hap Seng bids for half of Menara Citibank

The plantations and property group is believed to have offered RM800 per sq ft to RM900 per sq ft for the building

Plantations and property group Hap Seng Consolidated Bhd has offered to buy half of Menara Citibank, an office building located at the heart of the city centre, near the Petronas Twin Towers.

The 50-storey building, which is fully occupied, was previously called Menara Lion, and its holding company is Inverfin Sdn Bhd.

US lender Citigroup holds half of Inverfin, while Singapore's CapitaLand Ltd has 30 per cent and Lion Group's Amsteel Corp Bhd owns the remaining 20 per cent.

Sources told Business Times that Hap Seng wants to buy 50 per cent that's held by CapitaLand and Amsteel.

Hap Seng is believed to have offered RM800 per sq ft to RM900 per sq ft for the building that has a nett lettable area of 733,626 sq ft.

Based on the nett lettable area, the purchase price could translate into RM290 million to RM330 million.

Managing director Datuk Edward Lee Ming Foo declined to comment when contacted by Business Times. Regroup Associates Sdn Bhd, which is handling the sale of the property, also declined to comment.

In August last year, Business Times reported that the building was up for sale and three parties had been shortlisted.

Later that month, IOI Corp Bhd, announced that it had won the bid and agreed to pay RM586.7 million for Menara Citibank. Inverfin also has a RM160 million debt from the sale of seven-year bonds.

But three months later, the deal was aborted. IOI, citing concerns over the economy, forfeited some RM73.36 million of its initial payment.

The Lion Group built the property in 1994. In 2000, it sold half of the building to Citigroup for RM75.25 million, or RM543 per sq ft, to pare debt.

The building houses Citibank's local branch, Lion group offices, oil and gas company Talisman, Japan Airlines and the Tourism Board of Thailand, among others.

The net book value of the building as of December 31 last year was RM458 million, and the gross rental revenue was RM43.3 million (excluding the RM3.3 million revenue from its car park).

Meanwhile, in 2004, Hap Seng bought the 22-storey MUI Plaza in the golden triangle of Kuala Lumpur.

The building underwent a facelift and was given a new contemporary look in 2007. It was renamed Menara Hap Seng to reflect its ownership.

By Business Times (by Vasantha Ganesan)

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