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Wednesday, August 12, 2009

RM2.14b investment to build Lot G

Malaysian Resources Corp Bhd and its partners are investing RM2.14 billion in an integrated development, called Lot G, within the 28.8ha Kuala Lumpur Sentral.

The project, covering a 2.6 million sq ft area, comprises a retail mall, three office towers and a boutique hotel.

As part of the development, MRCB is teaming up with Pelaburan Hartanah Bhd (PHB) to build a seven-storey mall called Nu Sentral and a 27-storey office tower, with estimated gross development value of RM1.4 billion.

MRCB group managing director Shahril Ridza Ridzuan said the hotel and another two office towers will be developed with other partners, whom he did not disclose.

"We are four months into the construction (the mall and office tower) and essentially we are at about 9 per cent slightly ahead of our internal schedule, and we are looking forward for completion in 2012," he told a news conference after the launch of Lot G development by Prime Minister Datuk Seri Najib Razak at KL Sentral yesterday.

Also present was PHB managing director and chief executive officer Kamalul Arifin Othman.

Located to the south of KL Sentral station, facing Jalan Tun Sambanthan, Nu Sentral will be managed by Nu Sentral Sdn Bhd, a joint venture between MRCB and PHB, on a 51:49 basis. Promising Quality Sdn Bhd, a wholly-owned subsidiary of PHB, will manage the office tower.

Shahril said Nu Sentral and the office tower form about 9 per cent of KL Sentral's total gross floor area.

He said MRCB expects "decent commercial returns" from rental but he could not disclose the estimate as the company is currently in talks with potential tenants.

Nu Sentral will be the first green retail mall in Malaysia as it will undergo Singapore's BCA Green Mark compliance and Malaysia's Green Building Index certification.

The office tower, meanwhile, has already obtained pre-certification for the US-based Leadership in Energy and Environment Design (Silver).

Asked whether MRCB Land would be listed, Shahril said at the moment, MRCB would keep the entity internal.

"We are keeping it within MRCB group itself at the moment and essentially, the reason why we put it all together is to enable us to present this new brand to the market and leverage a lot of works for the last three decades in property development," he said.

MRCB had recently rebranded all of its property developments and real estate products as "MRCB Land".

By Business Times (by Hamisah Hamid)

MRCB to complete RM2.4bil Lot G at KL Sentral by 2012

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) says the Lot G development of its KL Sentral project, with a gross development value (GDV) of RM2.14bil, will be completed by 2012, while the entire KL Sentral development remains on track for completion around 2015-2016 as almost 60% of the project is finished.

The company launched yesterday the first instalment of Lot G, comprising a seven-storey retail mall and a 27-storey office tower with a GDV of RM1.4bil, through a 51:49 joint venture with Pelaburan Hartanah Bhd (PHB).

“Apart from this joint venture to build the mall and office tower, developments at Lot G will also include the construction of three office towers and a boutique business hotel that we will launch later,” MRCB group managing director Shahril Ridza Ridzuan said at the launch of Lot G Integrated Development-Retail Mall by Prime Minister Datuk Seri Najib Tun Razak.

“The next three years will see more developments within KL Sentral as we race towards fulfilling our development master plan’s completion goal in 2015-2016,” said MRCB chairman Tan Sri Azlan Zainol.

Azlan added: “Aside from Lot G, MRCB and its partners are simultaneously building the new CIMB headquarters in front of Muzium Negara, Shell’s new headquarters at 348 Sentral and will soon commence the construction of KL Sentral Park, our green-office campus development.”

He said that by next year, MRCB was expected to begin construction of a new office building, a luxury hotel and new luxury condominiums in front of Muzium Negara.

All these developments would bring the gross floor area under construction at KL Sentral to more than six million sq ft with an estimated GDV of more than RM7bil, Azlan said.

By The Star

Rental income to be PHB's revenue driver

PELABURAN Hartanah Bhd (PHB), a group set up to boost Bumiputera holdings of properties, expects revenue to grow 17 per cent to RM70 million this year, driven by rental income from properties it has bought.

"We have acquired four buildings in Klang Valley so far this year and we are in the process of acquiring one more. We would have five or more buildings by the end of the year," managing director and chief executive officer Kamalul Arifin Othman said.

He was speaking to reporters after the launch of Lot G development by Prime Minister Datuk Seri Najib Razak at KL Sentral yesterday.

The RM1.4 billion development of a retail mall and an office tower will be done jointly by Malaysian Resources Corp Bhd (MRCB) and PHB. PHB and MRCB teamed up in late 2007 to develop an integrated transportation hub in Penang, called Penang Sentral.

Kamalul Arifin said the company currently has about 100ha of land in the Klang Valley and Penang. It may buy more, particularly in Johor's Iskandar Malaysia.

"We are also looking at prime buildings that can generate immediate yields," he said.

The buildings that it has bought include Menara Bumiputra-Commerce in Kuala Lumpur from CIMB Group for RM460 million, and CP Tower in Petaling Jaya, from CIMB-Mapletree Management Sdn Bhd for RM200 million.

PHB is a wholly-owned subsidiary of Yayasan Amanah Hartanah Bumiputera. The foundation was announced by former Prime Minister Tun Abdullah Ahmad Badawi in Budget 2006. It was set up with an initial capital of RM2 billion.

By Business Times

Mah Sing plans RM690m project in Cyberjaya

KUALA LUMPUR: MAH SING GROUP BHD has acquired a 115-acre piece of land in Cyberjaya and plans to undertake high-end residential development project with a gross development value (GDV) of RM690 million.

Managing director and CEO Tan Sri Leong Hoy Kum said on Aug 12 the land was acquired for RM130.5 million and would be used for medium to high end residential development.

"As the residential properties in Cyberjaya comprise mainly medium range apartments and bungalow lots, we believe there is a pent-up demand for gated and guarded landed properties," he said.

Mah Sing also has the option to purchase 6.32 acres of adjacent commercial land at RM79 per sq ft within six months from the date of the signing of the sales and purchase agreement.

"We are bullish about the future of Cyberjaya," Leong added. Together with this project, named Garden Residence, Mah Sing has a total of 17 projects with remaining GDV and ubilled sales of approximately RM4.4 billion.

Year-to-date, the group has achieved sales of RM543 million, exceeding its full year sales taerget by 1.2 times. The group's unbilled sales stood at RM800 million and would take about two to three years to be realised.

It was also looking at acquiring more landbanks in the Klang Valley and hoped to conclude about three to four deals by this year end.

By The EDGE Malaysia (by Joy Lee)

Maguire Properties not mulling bankruptcy

NEW YORK: Maguire Properties Inc, one of the largest owners of office buildings in Southern California, said on Monday it would avoid bankruptcy even as two subsidiaries defaulted on mortgage payments and it plans to walk away from several properties.

The announcement is the latest example of the toll taken by the commercial mortgage crisis, which to Federal Reserve officials is a major threat to the economy as it tries to extricate itself from recession.

"We are not considering bankruptcy," chief executive Nelson Rising told analysts, adding the company was comfortable with its cash position and optimistic about attracting investment.

Maguire's stock fell as the company announced the defaults and said that it would "dispose" of seven properties, but turned higher after the CEO's call. The stock rose 15 cents to end at US$1.04 (US$1 = RM3.51) on the New York Stock Exchange, after earlier falling as low as US 71 cents.

By abandoning properties, Maguire may be setting a bad precedent for the US$700 billion commercial mortgage-backed securities market that financed a massive run-up in the sector through 2007. The trend could mean increased losses on deals in the market at a time when the Fed is calling on investors to participate in a programme aimed at restarting lending to companies like Maguire.

"They basically said that they are giving back buildings that are worth less than what they paid for them," said Thomas Fink, a managing director at Trepp, which aggregates commercial mortgage data. "We would anticipate that there will be some write-downs on some transactions."

Maguire said in a filing that the two subsidiaries failed to make debt service payments on mortgage loans associated with properties in Orange County and Los Angeles. It said its board had approved the disposal of the seven buildings to shore up its cash position.

Maguire said it will no longer fund the cash shortfall on the properties' mortgages.

Six of the loans were financed in the CMBS market at its peak from 2005 to 2007, and cash flow from the properties depended on fates of some tenants tied to the residential mortgage meltdown, including subprime lender Ameriquest Mortgage Co.

Maguire recorded a noncash impairment charge of US$345 million associated with the assets, which include Park Place I and II properties in Irvine, part of a residential and office building complex the company bills as an architectural gem. Falling revenue from Park Place II is related to the exit and 2007 bankruptcy of another leading subprime lender, New Century Financial Corp, according to Realpoint LLC.

By Reuters