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Monday, January 4, 2010

Work on Menara YNH to start in 6 months

An artist’s impression of Menara YNH

PETALING JAYA: YNH Property Bhd expects within the next six months to start work on its proposed Menara YNH project on three acres next to the Shangri-La Hotel along Jalan Sultan Ismail, Kuala Lumpur.

Although Kuwait Finance House Bhd (KFH) had two weeks ago aborted its plan to purchase one of the two office blocks at Menara YNH, YNH said it would proceed with building the project.

KFH had early last year offered to buy a 50% interest of the office component of Menara YNH from YNH Land Sdn Bhd. YNH Land is a unit of Kar Sin Bhd, which in turn is a wholly-owned subsidiary of YNH Property.

YNH head of corporate strategy Daniel Chan said the company was currently making some amendments to the project design to improve efficiency of tenant space by 10% to 15%.

The green project, built according to specifications of the Green Building Index, will have total net lettable space of 1.5 million sq ft.

“We will be resubmitting the amended project plan for approval. The development order was obtained last December,” Chan told StarBiz.

Chan said the project was within the company’s target and would be completed in five years.

The project will have two 45-storey office blocks with 600,000 sq ft of net lettable space each to be built on top of a three-storey retail podium.

The gross development value (GDV) of Menara YNH will be around RM2bil or averaging about RM1,500 per sq ft.

Chan said work on the retail podium would kick off first and would be completed within three years.

A group of local and foreign investors had early last year signed a sale and purchase agreement for the 300,000 sq ft of retail space for RM300mil.

On whether the company was looking for other buyers for the other parts of the project, Chan said: “We are not in any hurry to sell unless a good offer turns up. So far, we are talking to a few interested parties. With the strategic location of the property, we are confident of good interest and sealing a good deal.”

YNH would keep its options open, he said, adding that various parties had offered to team up as joint-venture partners for the project or buy over the property.

“We are optimistic of the project as its value has appreciated. When the project was first mulled three to four years ago, its GDV was only RM1bil but, today, its value has doubled,” he said.

Before KFH, CapitaLand Ltd of Singapore had more than two years ago agreed to a 40% share in a joint venture with YNH for the project but the deal fell through over disagreement in the land cost.

On prospects ahead for YNH, Chan said the Sitiawan-based property company had projects worth RM11bil over the next 15 to 20 years, and YNH also had unbilled sales of RM856mi from its existing projects that would be realised over the next three years.

This year, the company has lined up project launches worth some RM3bil, including Menara YNH.

The Fraser Residence KL mixed development, comprising serviced apartments, office and retail space, behind Renassisance Hotel with a GDV of RM550mil will be launched in June.

Another mixed development, the RM900mil Kiara 163 (formerly known as D’Kiara Place) located beside Plaza Mont’Kiara, will also have serviced apartments, office and retail components.

Chan said another prime project to look out for would be located on 100 acres near Resort World in Genting Highlands. The mixed development with a GDV of RM2bil will be launched in 2011 for completion in 10 years.

For the financial year ended Dec 31, YNH’s earnings should take a hit from the slow property market and deferment of project launches caused by the global financial crisis.

“Next year (2010) should be a better year and we certainly look forward to a double-digit growth,” Chan added.

By The Star (by Angie Ng)

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