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Thursday, November 19, 2009

YTL to rationalise RM8b retail, hotel assets into global REITs

Starhill REIT will have J.W. Marriott Hotel as one of its assets

KUALA LUMPUR: YTL Corp Bhd will embark on restructuring its RM8bil real estate investment trust (REIT) and its hotel portfolio.

This will rationalise the group’s retail and hotel asset portfolios by repositioning Starhill REIT as a global hospitality REIT.

It will involve the disposal of its two retail properties, Starhill Gallery and its parcels in Lot 10 to YTL Starhill Global REIT in Singapore.

“This will be followed by the injection of new hotel assets to put Starhill REIT on the path towards becoming a full-fledged international hospitality REIT,” said YTL Corporation in statement yesterday.

The disposal consideration for the retail properties is RM1.03bil that was determined based on independent valuations.

YTL Corp said after the proposed disposal, Starhill REIT would be well-positioned as a global hospitality REIT with two assets under its portfolio, namely the J.W. Marriott Hotel as well as 60 units of service apartments, four levels of commercial podiums and two levels of car parks at The Residences at the Ritz Carlton in Kuala Lumpur.

YTL Corp managing director Tan Sri Francis Yeoh Sock Ping said this exercise would restructure the RM8bil in retail and hotel assets under its control into two distinct REIT portfolios, namely the hospitality REIT in Malaysia and retail-centric REIT in Singapore.

“This will benefit both REITs in terms of pursuing growth and development strategies in terms in a single and focused class of assets.

“On the completion of the rationalisation, Starhill REIT in Malaysia will be transformed into a pure-play vehicle for hotel and hospitality-related assets,” said Yeoh, who is also the chief executive officer of Pintar Projek Sdn Bhd, which manages Starhill REIT.

Yeoh said hotel assets with the potential to be injected into Starhill REIT would include Pangkor Laut, Tanjong Jara and Cameron Highland resorts, Ritz-Carlton Kuala Lumpur and the remaining part of The Residences, among others.

“From a global standpoint, we see potential for Starhill REIT to acquire high-end assets in key-international hot-spots in Bali, Saint Tropez and Phuket,” he said.

Meanwhile, Yeoh said Starhill Global REIT had embarked on the acquisition of David Jones Building in Perth, Australia.

By The Star

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