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Saturday, January 16, 2010

SunCity plans to inject assets into REIT

(From left): Kuala Lumpur mayor Datuk Ahmad Fuad Ismail signs his name while Tan Sri Jeffrey Cheah and Ngeow Voon Yean look on at the launch of Sunway City Bhd’s Sunway Tower.

KUALA LUMPUR: Sunway City Bhd (SunCity) may inject Sunway Towers at Jalan Ampang and Sunway Hotel Seberang Jaya in Penang into its RM4bil real estate investment trust (REIT), said managing director for property investment Ngeow Voon Yean.

Ngeow acknowledged that the group had been planning to float its property assets through a REIT for a number of years, but delayed it due to poor market conditions.

He added that SunCity was hopeful of listing its REIT this year.

“We’re seriously considering it (but) it all depends on timing. Once the window is open for an IPO (initial public offering), we’ll list. We hope to do it this year,” he told reporters after the launch of Sunway Tower yesterday.

Previous reports said SunCity intends to inject Sunway Pyramid Mall, Sunway Resort Hotel, Sunway Pyramid Hotel, Menara Sunway, Sunway University College and Monash University campus in Bandar Sunway, Sunway Carnival Mall in Penang and Tambun Hypermarket Perak into its REIT.

Sunway Tower comprises 27 levels of Grade-A office space with a net lettable area of 276,000 sq ft, eight levels of car park space and a freehold parcel of adjoining vacant land.

Formerly Wisma Denmark, the building was acquired by SunCity in 2007 for RM170mil. Ngeow said the group had spent RM26mil on refurbishments, which resulted in a 30% to 40% increase in rental rates to RM5.50 per sq ft.

Ngeow said the building was almost fully occupied, and the group would be constructing another tower next to it.

“The total net lettable area for both towers will be 600,000 sq ft. The new tower should be 27 to 30 storeys high and will cost RM300mil,” he said. The two will collectively be known as Sunway Towers.

Ngeow also said SunCity planned for the Sunway Integrated Resort two office developments of 277,000 sq ft and 550,000 sq ft with a value of RM245mil and RM330mil respectively.

On the outlook of the Grade-A office space within the Klang Valley, he said: “If it’s well positioned and well managed, there’s still a good demand both in the CBD (central business district) of the Golden Triangle and the suburbs. That’s why we’re confident of expanding in this sector.”

On the group’s joint venture project in Tianjin Eco-City, China, Sunway group chairman Tan Sri Jeffrey Cheah said the project was “proceeding as scheduled.”

The project, which would have a gross development value worth more than RM2.48bil, is a collaboration with Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC).

SSTEC is a 50:50 joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Co Ltd and a Singapore consortium led by Keppel Group.

Meanwhile, Kuala Lumpur mayor Datuk Ahmad Fuad Ismail, who officiated the launch of Sunway Tower, said City Hall had yet to receive any application from Permodalan Nasional Bhd (PNB) or the Naza Group on their respective proposed 100-storey buildings.

“We only heard about this through the media. We’ve not received anything from either party,” he said.

In recent reports, PNB said it was looking at the possibility of developing a 100-storey skyscraper near the Stadium Merdeka/Stadium Negara area while the Naza group claimed it may develop a similar structure near the proposed Matrade Centre.

By The Star

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