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Thursday, May 5, 2011

TA Global mulls setting up REIT for hotels

Datin Alicia Tiah with a model of Azelia@Damansara Avenue

KUALA LUMPUR: TA Global Bhd may consider setting up a hospitality real estate investment trust (REIT) to unlock the value of its hotel assets that are located in China, Singapore, Australia and Canada which have a combined asset value of more than RM2bil.

Besides the hospitality business, TA Global, a 74%-owned subsidiary of financial services group TA Enterprise Bhd, is also involved in property development and investment.

According to TA Enterprise managing director cum chief executive officer Datin Alicia Tiah, the plan for a REIT was still preliminary.

“We may consider the REIT as part of the group's strategic plans going forward and are still studying the various options. It is important to get the timing right before proceeding to reit' our hotel assets,” Tiah told StarBiz in an interview yesterday.

TA Global's latest hotel acquisition was concluded on April 6. It paid US$60.75mil for Swissotel Kunshan, a five-star hotel in the city centre of Kunshan in Jiansu province, China.

The vendor was Dubai-based Kingdom Hotel Investments, a subsidiary of diversified Saudi conglomerate Kingdom Holding Co.

Its other hotel assets include Swissotel Merchant Court in Singapore that was purchased in 2009 for S$260mil while Westin Melbourne was purchased in April 2009 for A$160mil, Radisson Blu Plaza Hotel in Sydney was bought in 1997 for A$120mil, and the 193-room Aava Whistler Hotel in Vancouver, Canada, was purchased in 2008 for C$35mil.

Tiah, who is also a non-independent non-executive director of TA Global, said TA Global's hospitality business accounted for 63% of the group's revenue of RM410.03mil for the financial year ended Jan 31, 2011, while property development made up 22% and property investment 13%. Pre-tax profit for the period was RM125.34 mil of which hotels made up 41%, property development 31% and property investments 15%.

The group is also looking to launch more property projects both in the country and abroad later this year.

Projects worth some RM596mil are among the pipeline projects, a big jump from RM180mil that were launched last year.

Azelia Residence @ Damansara Avenue in Sri Damansara comprising 250 condominium units with estimated gross development value of RM210mil, will be launched this Saturday.

The initial launch will comprise 43 low-rise residences and 58 high-rise units worth some RM120mil.

Launches coming up in the third or fourth quarter this year will be condominium projects in Dutamas and Cheras in Kuala Lumpur.

The Dutamas project will feature residences of between 1500 sq ft and 1700 sq ft while the project in Taman Permata, Cheras, will be smaller residences of 500 sq ft to 1300 sq ft.

TA Global is also planning to launch its two overseas projects in Canada and Australia this year.

The Gardens project in Richmond, British Columbia in Canada will comprise 470 residential apartments and about 70,000 sq ft of retail cum office space.

The project earmarked for launch around June or July will have an estimated GDV of C$170mil.

It is a 35:65 joint venture between Townline Gardens and TA Development One Canada.

Of the 22.78 acres of land, the development area will take up 10.5 acres while the balance 12.28 acres will be used for a park.

Meanwhile, the project Down Under, the Little Bay project in Sydney, is targeted for launch in the fourth quarter this year.

Located on 33.6 acres, the low-rise residential development comprises townhouses and courtyard homes with estimated GDV of A$600mil.

The project is a 50:50 development sponsorship with Charter Hall Group of Australia.

By The Star

Mutiara buys stake in Tambun unit

PETALING JAYA: Property developer Mutiara Goodyear Development Bhd is acquiring 40% stake in Palmington Sdn Bhd, a unit of Tambun Indah Land Bhd, for RM2.34mil cash in a move to jointly develop 527 acres in Seberang Perai.

In a filing to Bursa Malaysia yesterday, Mutiara Goodyear said it was selling the 527 acres to Palmington for RM233.2mil cash.

Mutiara Goodyear has agreed to provide funding in proportion to its shareholding in Palmington to part-finance the purchase of the land, amounting to RM98.8mil.

In a separate press release, Tambun Indah would finance its portion of the land purchase amounting to RM139.9mil via internally-generated funds and bank borrowings.

Mutiara Goodyear executive chairman Hamidon Abdullah said, “I am very confident with the prospect of this development due to its proximity to the Penang Second Bridge.”

By The Star

Mulpha Land proposes RM101m rights offer

Mulpha Land Bhd, a Malaysian property developer, proposed a rights offer to raise about RM100.5 million (US$34 million) to help finance its business expansion, according to a company statement late yesterday.

The indicative price for the rights issue, which comes with free warrants, is 22 sen a share, the company said.

By Bloomberg