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Monday, June 6, 2011

N2N Connect buys officer tower in Bangsar South for RM36m

KUALA LUMPUR: N2N CONNECT BHD is acquiring an 11-storey office building in Bangsar South for RM36 million cash to be partly used as its office space, and to be let out to third party tenants.

In a filing Monday, June 6, N2N said it had entered into sale and purchase agreement with Bangga Istimewa Sdn Bhd to acquire the building known as Block 6 (Type G) as the The Horizon, Phase 1 in Bangsar South.

N2N said it planned to occupy four storeys of the property for its own use and rent out the remaining floor space to third party tenants.

“Based on conservative management estimates of current office rental rates in the vicinity of the property of RM5 per sq ft per month, it is estimated that the rental income to be generated is approximately RM1.76 million per annum, assuming the leasing out of the entire seven storeys of the property to third party tenants,” it said.

N2N said it would finance 75% or RM27 million of the purchase price via borrowings, while the remaining RM9 million would be through funded internally.

The company said the The Horizon, Phase 1, was a commercial development comprising 14 blocks of 11-storey stratified office buildings erected on a three-level basement car park.

The entire blocks of The Horizon, Phase 1, are MSC-compliant and completely broadband enabled, it said.

“The Horizon, Phase 1, forms part of the ongoing integrated township development known as Bangsar South.

“When fully-developed, Bangsar South will consist of Grade-A offices, retail avenues, boutique condominiums, service suites, a clubhouse and a boulevard,” it said.

N2N said that acquisition would provide it savings on its current rental expenses; a hedge against future increase in rental expenses; potential capital gains arising from the expected appreciation in value of the property; and secure sufficient office space to cater for the future expansion of N2N to be housed all under the same roof as the property is designated as a MSC Malaysia Cybercentre.

“It is a conducive environment to promote growth of N2N as a MSC Malaysia status company,” it said.

By The EDGE Malaysia

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