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Friday, July 3, 2009

UDA considering plan to raise RM500m via REIT

PROPERTY and leisure group UDA Holdings Bhd said it is considering a plan to raise up to RM500 million by selling shares through a real estate investment trust (REIT) in two years, as it looks at ways of unlocking value from its property assets.

UDA, a unit of the Minister of Finance Inc, plans to list a retail REIT in Malaysia, which would include BB Plaza in Kuala Lumpur, Greentown Mall in Ipoh and Plaza Angsana in Johor Baru, managing director Datuk Jaafar Abu Hassan said.

"We are considering (to raise money through) a REIT, but the plan is subject to stakeholders' views and opinions," Jaafar told Business Times yesterday.

The group will undertake a detailed study before it embarks on the plan.

"The REIT would need a positive income stream. We have over 12 properties, but they are not attracting enough yields. We are pushing for business. Our malls have potential to do better," Jaafar said.

He added that the idea for a REIT was mooted a few years ago, but was put on the backburner as UDA grapples with low rental rates.

UDA's current asset is worth over RM2 billion. Besides BB Plaza, Greentown Mall and Plaza Angsana, which have yields of up to 8 per cent, it owns Hentian Puduraya, Hentian Duta, Cahaya Suria, Pertama Complex, Sinar Kota, Plaza UO, Plaza Warisan and Tunas Utama in Kuala Lumpur and Plaza Ampangan in Seremban.

UDA also owns Ancasa Hotel Kuala Lumpur, Puduraya Hotel, Ancasa Resort Allsuites (apartment) Port Dickson, Jerejak Resort & Spa in Penang, and Kuala Terengganu Golf Resort.

Jaafar also said UDA will spend RM60 million over the next 6-10 months on a facelift for its malls and commercial buildings, and another RM15 million to refurbish its leisure properties.

Meanwhile, the group's focus will remain on increasing Bumiputera participation in economic activities and property ownership in urban areas.

"In UDA, we give rebates and opportunities to Bumiputera entrepreneurs and others to do new business. Whatever that we plan, it must yield positive results," Jaafar said.

UDA is targeting RM400 million in revenue this year and to maintain its 2008 net profit.

For fiscal year 2008, UDA posted a net profit of RM28.8 million on revenue of RM313.3 million.

Jaafar attributed the higher revenue to its 14 on-going projects in the Klang Valley, Penang, Johor and Pahang, worth a combined RM900 million.

"We will launch more projects this year. The business has to move despite the turmoil," Jaafar said.

By Business Times (by Sharen Kaur)

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