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Wednesday, October 3, 2012

Naim targets RM3bil REIT with ‘mini KLCC’ project

KUALA LUMPUR: Naim Holdings Bhd is the latest property group to express ambitions of having its own real estate investment trust (REIT), with a target size of RM3bil. The plans, though, are in early stages, but will include new developments such as its “mini KLCC” project, which has yet to be named, at the old Bintulu Airport, that carries a gross development value (GDV) of some RM2bil.

This puts the Sarawak-based Naim Holdings, which also has a significant construction arm, in the same category of companies such as TA Global Bhd and KLCC Property Holdings Bhd, which have in recent times expressed interest in forming their own REITs.

Both property and construction arms contribute equally to the company's revenue.

Speaking to reporters at a luncheon yesterday, senior director for corporate services Ricky Kho said the company planned to launch the REIT in six to nine years, when its property assets had reached a “sufficient size.”

It was the company's long-term plan to generate recurring income and gain in property value, He said, adding that the REIT would allow the company to manage the tenant mix of its commercial property units to “maintain the dynamic and vibrancy of the entire development.”

If all goes as planned, Naim Holdings' REIT will be the first Sarawakian REIT.

The properties that will be injected into the proposed REIT include Naim Holdings' completed two-storey Miri Permy Mall. The remaining REIT properties that have yet to be completed are the development of the old Bintulu Airport, a mixed-development in Batu Lintang in Kuching, Pantain Piasau Residences and Piasau Camp in Miri.

Permy Mall's occupancy rate is 94%, and it is expected to generate rental income of RM8mil per annum. “It is already giving us a return of 12% on rental income,” Kho said.

The total development cost, including land and building for the Permy Mall, stands at RM52mil. As at Dec 31, 2011, the estimated fair value for the building and land was RM85mil and RM3.6mil respectively.

Naim Holdings aims to develop a “mini KLCC” at the old Bintulu Airport situated in the New Bintulu City Centre, with a GDV of RM2bil.

“We are going to have a shopping complex, condominiums, SOHO (small office home office) units and hotels,” Kho said.

The whole project will take about 10 to 15 years to be fully complete. The company will launch the shopping complex worth about RM400mil early next year.

Naim Holdings will be developing a 34-acre site in Batu Lintang, Kuching, for a mixed development with a GDV of RM1.8bil spread over 20 years. The company will build the residential segment by the end of next year.

The company has a landbank of about 2,620 acres with an estimated GDV of RM9.5bil. Kho mentioned that the company was still looking to increase its landbank in the Samaluju area in Bintulu.

The Sawarak-based company has about RM1.3bil in its construction orderbook, which is mainly for infrastructural work in the Sawarak Corridor of Renewable Energy (Score).

Score is one of the five regional development corridors initiated by the Federal and Sarawak state government to develop and transform Sarawak into a developed state by 2030.

The corridor will encourage investments in power generation via energy resources like hydro-power, coal and natural gas, which have been found in Sarawak's central region.

The company was recently awarded a RM208.2mil contract via its wholly-owned subsidiary, Naim Engineering Sdn Bhd, for one of the work packages under the Klang Valley Mass Rapid Transit project in Kuala Lumpur.

By The Star

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