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Friday, August 7, 2009

SunCity may revive REIT plan

Property group Sunway City Bhd (SunCity) may revive a US$860 million (RM3 billion) plan to float its property assets through a real estate investment trust (REIT) next year depending on the recovery in markets, a top executive said.

"We will certainly go forward with the REIT. The only question is the right timing," said Ngeow Voon Yean, managing director for property investment at SunCity.

The move was stalled earlier this year as markets tumbled amid the global financial crisis.

The listing plan will see SunCity, the country's sixth largest developer with a market value of US$455 million (RM1.6 billion), injecting its retail property assets such as shopping malls, hotels and theme parks into an investment trust.
"These few months will be a good signal to see where we are heading, but frankly, whatever we are looking at will be next year," Ngeow said in an interview.

Malaysia's recent move to ease listing rules and a recovery in Asia's initial public offering market augur well for the listing.

Ngeow, however, said the company was unlikely to bring back the plan until it could see a convincing recovery in foreign interest for local real estate.

"This would be one of the largest REIT exercises in Malaysia. So we would need foreign interest to take up some of the units. Once the foreign appetite for our real estate sector comes back, then we will come in," he said.

Starhill Global Real Estate Investment Trust, controlled by YTL Corp Bhd said in June that it planned to raise about S$337 million (RM822 million) to cut debt and get new funds for possible acquisitions.

The listing of SunCity's investment properties is part of its broader strategy to grow its overseas operations.

By Reuters

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