Sunway REIT targets RM7bil asset value

PETALING JAYA: Sunway REIT Management Sdn Bhd, the manager for Sunway REIT, is looking to make some sizeable and meaningful asset acquisitions in the medium term and widen the REIT's presence in the country.


Datuk Jeffrey Ng says one of the acquisitions involved a shopping mall from a third party vendor. However, he expects more competition for good assets, especially with the emergence of more well capitalised REITs in the country.

Chief executive officer Datuk Jeffrey Ng said one of the acquisitions involved a shopping mall from a third party vendor.

Ng said one of the growth plans for Sunway REIT was to expand its asset value to RM7bil in the next five to seven years.

However, he expected more competition for good assets, especially with the emergence of more well capitalised REITs in the country.

“Besides shopping for good assets from third parties, Sunway REIT also has the first right of refusal for Sunway City Bhd's (SunCity) assets which guarantees a ready pipeline of assets for injection into the trust,” he told StarBiz.

Among the new commercial projects underway by SunCity include a number of office towers and office cum retail projects in the Klang Valley.

A new commercial project, Sunway Velocity in Cheras will feature office suites, service apartments, and a shopping mall.

“Sunway REIT will remain as a a retail-focused REIT with an asset portfolio that comprises 60% of retail assets and the balance will be a mix of hospitality, office buildings and other commercial assets,” Ng added.

The trust's eight assets are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya, Menara Sunway and Sunway Tower.

Sunway REIT was listed on Bursa Malaysia on July 8 last year.

For the second quarter ended Dec 31, 2010, Sunway REIT recorded gross revenue of RM85.3mil compared with RM72.4mil in the previous quarter. Net property income rose to RM62.8mil from RM55.2mil previously.

The trust would be paying 1.75 sen per unit to its unitholders, a 15.9% increase over the payout in the first quarter.

Total income for distribution amounted to RM46.9mil from realised net profit of RM44.7mil, which is equivalent to a 105% payout ratio.

Ng said the strong second quarter performance was mainly due to a 17.1% increase in the rental renewal rates for the next three years in Sunway Pyramid Shopping Mall.

“The vibrancy of and business synergy within Sunway Integrated Resort City (previously Bandar Sunway) is a key driver to the double-digit rental growth recorded for the retail space at Sunway Pyramid,” he said.

Ng said the rental reversion of Sunway REIT's portfolio of 16% was stronger than other REITs in the country and the improved performance starting this quarter would flow through to unitholders over the coming years.

An analyst with a local brokerage said it was important for Sunway REIT to pursue a consistent asset acquisition strategy to enhance its yield accretive potential.

“It must buy assets that offer potential for higher net lettable area and spruce up the properties to improve the rental rates. Sunway REIT is pretty much a yield play and unitholders mostly invest in the REIT for its dividend yield of 7% to 8% a year,” the analyst added.

By The Star

Sunway adds shine to REITs

The real estate investment trusts market is expected to be an attractive investment with positive macro economy numbers and higher disposable income.

More property groups are likely to set up real estate investment trusts (REITs) in Malaysia this year as the market continues to stay attractive, said the manager of a major property trust.

"With positive macro economy numbers and higher disposable income, we expect the REIT market to be an attractive investment," said Datuk Jeffrey Ng, the chief executive officer of Sunway REIT Management Sdn Bhd (5176), the manager for Sunway REIT.

Sunway REIT is Malaysia's largest REIT, and it is also the largest REIT initial public offering in Asia, excluding Japan, since 2007.

It was launched by Sunway City Bhd and Sunway REIT Management last July, with eight assets worth RM3.7 billion.
Sunway REIT is expected to double its asset size to RM7 billion in five years, which will comprise 60 per cent of retail properties.

Ng said it is looking for properties to buy, but he declined to elaborate.

Pipeline properties include the two new phases to Sunway Pyramid mall, now known as SP3 and SP4.

Ng said Sunway REIT has helped to bolster the equity market and made it more attractive to foreign institutional players.

"Before the entry of Sunway REIT, the Malaysian REIT (M-REIT) market was never on the international radar screen as the players were too small to attract foreign investors.

"With Sunway REIT coming in, I think we have been catalytic to put M-REIT back on the global funds' radar," he said on Friday in Bandar Sunway, Selangor.

Sunway REIT's assets are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel and Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya and two office towers.

Sunway REIT is 58 per cent held by institutional funds like the Employees Provident Fund, Permodalan Nasional Bhd, Government of Singapore Investment Corp and Great Eastern Life Assurance (M) Bhd. Some 26 per cent of the trust is held by foreign unit holders.

By Business Times

Sunway REIT to beat profit forecast

SUNWAY Real Estate Investment Trust (REIT), Malaysia's biggest property trust, expects to do better than the RM170 million net profit it forecast for the year.

This is due to strong rental revision of 16 per cent for its entire portfolio in 2010, which has improved performance of the properties, Datuk Jeffrey Ng, the chief executive officer of Sunway REIT Management Sdn Bhd said.



Sunway REIT has eight assets worth RM3.7 billion. They are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel and Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya and two office tower.

Ng said the main driver for growth this year will be Sunway Pyramid.
Net rental for Sunway Pyramid was raised from RM8.90 per sq ft (psf) to RM9.40 psf after Sunway REIT's initial public offering last July, by Sunway City Bhd (SunCity).

The mall has recorded a sales growth rate of 15 per cent, higher than industry growth of between five and 10 per cent.

Any major change to the mall's earnings will have a positive impact on the trust's overall performance as it contributes 60 per cent to the trust's earnings.

Ng expects Sunway REIT to also surpass its forecast revenue of RM330 million, led by overall improvement of Sunway Integrated Resort City (SIRC).

SIRC, a multi-billion development by Suncity has two operating hotels, shopping malls and universities, Sunway Medical Centre, condominiums and villas, convention centres, shopoffices and a theme park.

Ng said SIRC will benefit from the rising growth in tourism spending, which is around RM50 billion a year.

"If SIRC continues to grow and be vibrant, there is no reason why Sunway REIT cannot achieve double digit growth year on year," Ng said.

By Business Times

Sunway REIT posts RM356m interim profit

Sunway Real Estate Investment Trust posted RM355.9 million pre-tax profit for the six months ended Dec 31, 2010, on the back of RM157.778 million revenue.

For the second quarter, the company registered RM45.2 million pre-tax profit on the back of RM85.333 million revenue.

In a filing to Bursa Malaysia, it said the better performance for the current quarter was contributed by the commencement of new tenancy terms pursuant to renewals at the Sunway Pyramid Shopping Mall about one million square feet of net lettable area achieved an average increase in rental rates of 17.1 per cent for the three-year term.

The stronger performance at Sunway Resort Hotel & Spa and Pyramid Tower Hotel during year-end holiday season further contributed to improved results for the current quarter.

On the prospect, it said, visitorships to Sunway Pyramid Shopping Mall registered strong quarter-on-quarter growth of 9.7 per cent, whilst Sunway Carnival Shopping Mall recorded moderate growth of 2.9 per cent due to the year-end mega sales campaign and festive and school holidays.

It said occupancy remain strong with Sunway Pyramid at 98 per cent, Sunway Carnival at 93 per cent and Suncity Ipoh Hypermarket at 100 per cent.

The Sunway REIT Management Sdn Bhd believes the Sunway REIT retail properties, especially Sunway Pyramid Shopping Mall, will be able to enjoy another year of solid performance in tandem with the expectation of continued robust domestic consumption, pursuit of lifestyle trends and thriving Sunway Integrated Resort City.

As for the hotel market, it said the Sunway REIT's hotel properties would continue to perform well in line with the positive outlook for the industry.

In the quarter under review, the Sunway Resort Hotel & Spa and Pyramid Tower Hotel enjoyed strong occupancy (Sunway Resort Hotel & Spa: 70.8 per cent; Pyramid Tower Hotel: 86.3 per cent) and average daily rates (Sunway Resort Hotel & Spa: RM407; Pyramid Tower Hotel: RM258) in conjunction with the year-end school holidays and MICE (meetings, incentives, conferences and exhibitions).

Meanwhile, Sunway Hotel Seberang Jaya, a four-star corporate hotel, enjoyed steady performance as the domestic and global economy recover.

The office market, occupancy at both the Sunway REIT’s office properties, has been stable at 99.5 per cent for Menara Sunway and 97.0 per cent at Sunway Tower.

The occupancy for Menara Sunway and Sunway Tower is expected to remain stable and the rental rates are expected to increase moderately for the renewals in 2011.

By Bernama

CapitaMalls confident of meeting payout target

KUALA LUMPUR:CapitaMalls Malaysia REIT Management Sdn Bhd (CMRM), the manager of CapitaMalls Malaysia Trust (CMMT), is confident of achieving its target of 7.45 sen distribution per unit (DPU) amid the positive microeconomic outlook for Malaysia this year.

CMMT, a shopping mall real estate investment trust (REIT), recorded a total annualised DPU of 7.26 sen for last year, exceeding its forecast of 7.16 sen as stated in its listing prospectus.

CMRM chief executive officer Sharon Lim said the company’s strong operating performance demonstrated its ability to proactively manage its assets and create value for unitholders.

“Ours malls maintained close to full occupancy (98.3 per cent), while shopper traffic grew to 16.2 per cent (13.1 million) in the fourth quarter ended December last year compared to the year before (11.3 million).

“We also expect to complete our proposed acquisition of Gurney Plaza extension by this year,” she told reporters during a briefing on the company’s fourth quarter results here yesterday. Sharon said CapitaMalls Asia’s recent acquisition of Queensbay Mall in Penang would form the seed asset for its planned RM1bil Malaysia retail property fund, which would provide a pipeline of assets for CMMT to acquire.

“CMMT will continue to actively pursue acquisition opportunities on its own, to increase its asset size and strengthen its position as Malaysia’s largest ‘pure-play’ shopping mall REIT,” she said.

For the fourth quarter of 2010, CMMT achieved a distributable income of RM24.8mil which was 3.1% higher than its forecast of RM24.1mil while DPU was recorded at 1.84 sen, 3.4 per cent higher than its forecast of 1.78 sen.

CMRM chairman Kee Teck Koon said: “With our quality portfolio of three strategically located shopping malls in the higher growth urban centres of Penang, Kuala Lumpur and Selangor, CMMT is well positioned to capitalise on the expansion in Malaysia’s retail sector.”

By Bernama

TILB focuses on mainland Penang projects

KUALA LUMPUR: Newly-listed Tambun Indah Land Bhd (TILB) expects to complete the first of its seven ongoing property projects on mainland Penang in the first quarter of this year.

The company will complete the second phase of its RM79mil Juru Heights bungalow project by March, according to managing director Teh Kiak Seng.

“We have seven projects ongoing this year with a GDV (gross development value) of RM530mil. They include medium-cost apartments and mid-range housing developments,” he said after the listing ceremony of TILB on the Main Market of Bursa Malaysia yesterday.

Going forward, Teh said TILB would continue to develop projects on mainland Penang (as opposed to the island) as properties there were more affordable.


Teh Kiak Seng (second from left) and Tambun Indah Land directors monitoring the company’s share price on Tuesday.

“We are getting more purchasers coming to the mainland because they can't afford prices on the island,” he said, adding that it would be more viable for TILB to tap the mainland property market.

“The Penang state population is about 1.6 million. The island has 700,000 people. There are more people staying on the mainland and it is also attracting a lot of FDI (foreign direct investments),” Teh said.

He cited, as an example, Japan-based printed circuit board maker Ibiden Co Ltd, which has invested in a RM1bil plant at Penang Science Park. He also mentioned Nasdaq-listed Rubicon Technology Inc, a leading global light-emitting diode (LED) manufacturer, as well as US-based Honeywell Aerospace, a leading provider of avionics and electronics, which have also invested substantially in the mainland.

“Connectivity (in Penang) is also being improved with the construction of the second Penang bridge,” Teh said, adding that the Federal Government had big plans to develop Butterworth.

“Expansion at Butterworth Port has just been completed. The main railway station is also in Butterworth. All of this will create opportunities such as new jobs and attract more people, who will need to buy houses to be closer to the job market.”

Teh also said the Penang mainland property market was more active and had better growth prospects.

“During the recession in 2009, the Penang island property market grew by 0.3%, but mainland Penang grew by 9.3%,” he said.

“Also, from 2002 to 2010, the island housing market grew by 4%, but mainland grew by 5.4%.”

According to Teh, TILB has a land bank of close to 300 acres, all located on the mainland.

“We have an option of another hundred acres. We move very fast, we buy land and develop. We don't buy land to keep as it's too costly. This has been our business model since the beginning.”

TILB was negotiating with land owners in Penang to acquire land for projects in 2012 and “actively seeking” land in the Klang Valley, he said, adding: “We've seen some land in the Klang Valley but we haven't bought any. We're still looking but the project must be viable.”

On another note, Teh said the company had set a dividend payout policy of 40% to 60% of its annual net profit.

TILB recorded a net profit of RM25.37mil for its financial year 2010.

The company opened at 80 sen and closed at 80.5 sen, a 10.5 sen premium over its issue price of 70 sen. A total of 41.5 million shares were traded, making it the second most active counter of the day.

By The Star

AmResearch maintains buy on SP Setia

KUALA LUMPUR: AmResearch maintains its BUY rating on SP Setia and raises its fair value from RM6.80 per share to RM7.10 per share based on an unchanged 5% discount to its revised fully diluted (FD) net asset value (NAV) of RM7.46.

“We lifted our FD NAV from RM7.15 to RM7.46 to account for the estimated accretion to assets value from its landbanking deal with the Ministry of Health (MOH). SP Setia has been given the right to develop 40 acres of prime land in Bangsar in return for a new health and research complex on a 55-acre site in Bandar Setia Alam,” said AmResearch

Based on AmResearch's conservative estimated plot ratio of 5 times (x) and an efficiency factor of 70%, the net saleable area is about 6.1msf. Assuming an average selling price of RM1,000psf, the gross development value is about RM6.1bil.

Compared to status quo, AmResearch said this land swap is accretive because the Bangsar site has high development potential and ready end-user demand. And, the relocation of the new research complex would accelerate the maturity of Setia City, the commercial precinct in Setia Alam.

“But the deal fell short of consensus expectations. SP Setia would only have a 50% stake. The joint venture company would also have to distribute 20% of its profits to the MOH,” “SP Setia also spooked the market by announcing a surprise placement of up to 15% (153mil) of its paid-up capital to raise funds for its existing projects and future' expansion,” said AmResearch.

AmResearch said the market would need to digest the immediate dilution risk from the proposed placement and the back-ended accretion to assets value from the land swap. After the sell down yesterday, this trade-off is already being priced-in.

Hence, the risk reward profile is turning more favourable starting from a lower entry point because the fundamental story is intact, we believe. For a start, it is poised to deliver at least RM3bil in sales this year, given maiden contributions from the prolific KL Eco City.

Given a recapitalised balance sheet (post the proposed share placement), SP Setia must again demonstrate its uncanny ability to grow acquisitions.

The litmus test though is how prolific and significant its next land deal is going to drive NAV growth, considering its share capital would have expanded by 15% post the share placement.

By The Star

Axis-REIT records RM16m profit in Q4

AXIS REIT Managers Bhd has reaped RM16.16 million profit in its fourth quarter ended December 2010 and plans to distribute 5.25 sen a unit to investors.

"Last year, we saw the highest gain in fair value of investment properties for a single year since the listing of the trust," said chief executive officer Stewart Labrooy. He said the company revalued 14 of its stable properties.

"It has led to an increase in the net asset value of the trust to close at RM2.009 a unit compared with RM1.842, a year ago," he told reporters at a briefing in Kuala Lumpur yesterday.

In the fourth quarter of 2010, Axis-REIT bought three more properties, namely Tesco Hypermarket, Axis PDI Centre and Axis Technology Centre. It also concluded the purchase of two IDS warehouses in Seberang Prai, Penang.

Following these acquisitions, Axis-REIT now owns 26 properties. Its net asset value rose to RM1.18 billion in 2010 from RM884.96 million in 2009.

Two days ago, Axis-REIT said it will sell an industrial complex in Port Klang for RM14.5 million by June 2011.

"We need to maintain growth by culling smaller assets where the returns have stagnated. We will bring in assets that have capital gain potentials," said Labrooy.

"We'll gain RM764,000 from the sale of industrial complex in Port Klang and this will be chanelled back to unitholders," he added.

On outlook for 2011, he said Axis-REIT is looking to buy five more warehouses in Johor and the Klang Valley and two more office blocks in Cyberjaya. So far, the company has set aside RM365 million for these acquisitions.

By Business Times

Axis-REIT to sell Port Klang complex

AXIS Real Estate Investment Trust (REIT) hopes to complete the sale of an industrial complex in Port Klang for RM14.5 million by the end of June this year.

Axis will make a net gain (after real property gains tax) of RM764,000 from the sale to freight services firm Freight Management Sdn Bhd.

It told Bursa Malaysia yesterday that the amount would be distributed to its unitholders this year at 20 sen a unit and also be used to reduce its gearing.

It was the right time to dispose of the property as it offered limited upside for future rental growth, Axis added.

By Business Times

Axis-REIT sells Port Klang building

Axis Reit Managers Bhd (ARMB) and Axis Real Estate Investment Trust (Axis-Reit) has proposed to dispose Axis North Port LC1 for RM14.5 million to Freight Management (M) Sdn Bhd.

Located in Port Klang, Axis North Port LC1 is an industrial complex comprising a single-storey detached warehouse with a double-storey office annexe, a double-storey amenities building and other ancillary buildings.

ARMB confirmed that OSK Trustees Bhd, the trustee for Axis-Reit, has entered into a sale and purchase agreement for the disposal of Axis North Port LC1.

The proposal is in line with meeting the objective of Axis-Reit, it said in a statement.

By Business Times

Axis REIT to grow 19.6pc in 2011: ECM

ECM Libra expects a 19.6 per cent earnings growth in Axis Real Estate Investment Trust (REIT) Financial Year 11 (FY11) due to contributions from four recently acquired properties.

Axis REIT has completed acquisition of PTP D8 in Johor, Axis Technology Centre in Petaling Jaya, Axis PDI centre in Kuala Langat, Selangor and Tesco Johor as well as its proposal to acquire an office building in Cyberjaya for RM51.3 million which will be completed in the first quarter of this year.

In its research note on Axis REIT, ECM Libra said it expects more acquisitions going forward.

"We understand that the management is working on the acquisition of an office warehouse in Petaling Jaya, a logistics warehouse in Johor and a warehouse/logistics and manufacturing facility in Shah Alam/Klang," ECM Libra said..

ECM Libra is recommending a "BUY" on Axis Real Estate Investment Trust (REIT) with a target price of RM2.90.

"Despite its defensive quality, Axis’ average annual total return of 23 per cent since its listing in 2005 outperforms the equity market as represented by the total return of the benchmark FBMKLCI over the corresponding period," the research house said.

ECM Libra said another plus point is its distribution visibility as Axis commits to distribute 99 per cent of its earnings on quarterly basis.

Axis has the most enviable acquisition track record among M-REITs as it has grown its asset under management (AUM) from five properties with AUM of RM260.4 million to 27 properties with AUM of RM1.4 billion now.

By Bernama

Sluggish outlook for property investment trusts

Prospects for real estate investment trusts (REITs) are sluggish as there are fewer Grade A office buildings for sale in Greater Kuala Lumpur.

As such, Rahim & Co managing director Robert Ang reckons there will be fewer REIT launches this year.

"REITs look at investments of above RM100 million. However, there is no good stock in the market. If there are quality assets, most developers will hang on to them as an investment, and probably float their own REITS," Ang said.

"What you have in the market now are assets for sale by trust funds who are cashing out," he said after a briefing on the Malaysian property market outlook in 2011 in Kuala Lumpur yesterday.

Ang said developers may take up property investment as a side income because of scarce land for new projects.

Nevertheless, he expects more launches this year compared with 2010, with prices for landed residential properties increasing by 5 per cent to 10 per cent in choice locations.

But he cautioned that ordinary investors are staying out of the market.

"Fundamentals are not strong for foreign investors to come here. There is oversupply of condominiums in Kuala Lumpur. The vacancy rate is 30 per cent and rentals are softening. I do not foresee a major price increase for the next one to two years," he said.

Ang said developers are still launching condominiums in Kuala Lumpur despite an oversupply situation and sales have been brisk as prices are 20 per cent less from the peak.

Meanwhile, Rahim & Co founder and executive chairman Datuk Abdul Rahim Rahman said the Malaysian property market will do better this year, led by projects under the Economic Transformation Programme.

Abdul Rahim expects more demand for residential, commercial, industrial and retail properties.

He said projects like the Sg Buloh land and Sg Besi airport redevelopment, the Matrade project by Naza Group, the Kuala Lumpur International Financial District and the 100-storey tower by Permodalan Nasional Bhd will contribute to growth in the property sector over the next few years.

"There would not be a nationwide phenomenon of property bubble," he said.

By Business Times

Axis-REIT wants to buy building for RM51m

Axis Real Estate Investment Trust(Axis-REIT) is proposing to acquire a four-storey building, together with a freehold land, in Selangor from FSBM Holdings Bhd for RM51.25 million.

The proposed acquisition would be consistent with the investment objective and would be accretive to Axis-REIT's distribution income, the company said in a filing to Bursa Malaysia today.

It said the proposed acquisition would diversify and enlarge Axis-REIT's portfolio of properties and was expected to benefit the fund over the medium to long-term.

By Bernama

GuocoLand says no plan to set up REIT

SINGAPORE: Singapore-listed developer GuocoLand, a firm linked to Malaysian billionaire Quek Leng Chan, said today it had no plans to set up a real estate investment trust (REIT), dismissing a report in the Business Times newspaper.

GuocoLand rose as much as 2.7 per cent today after paper said it may float two real estate investment trusts with assets of up to S$8 billion (US$6.2 billion) in the next 3-5 years.

“GuocoLand wishes to clarify that the group currently has no plans to establish a real estate investment trust,” it said in a filing to the Singapore Exchange.

“The group will review this as a possible strategy to extract value from its property portfolio, at the appropriate time,” it added.

By Reuters

Malaysia REIT yields expected to fall

The yields of Malaysian Real Estate Investment Trusts (REITS) are expected to come down next year in view of the surplus in office buildings with the completion of new projects.

The yield, which is also known as return on investment in properties, is derived by dividing rental with property value.

President of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia, Choy Yue Kwong, said while the surplus in office buildings is expected if more developers receive the nod to build, there are very few premium-grade 'A' buildings.

"Investment-grade buildings with premium values are the ones foreigners are looking for," Choy said in an interview.

Choy said while there are enough of good properties in Kuala Lumpur, not many of them are for sale.

"Some of them are owned by banks and most of them do not have the incentives to sell," he said.

He said the owners, some of them big corporates like Boustead Holdings Bhd and its major shareholder, Armed Forces Fund Board, own a lot of properties but may not be motivated to sell them as they are in the business of investing in properties and collecting rentals to pay dividend to members.

However, Choy said, there are rare instances when corporates or REITs will sell.

In March this year, Pelaburan Hartanah Nasional Bhd, manager of Amanah Harta Tanah PNB (AHP) sold three parcels of land in Pahang, Perlis and Kedah, together with shopoffice units erected on the parcels, to Permodalan Nasional Bhd for RM2.01 million.

The proceeds from the disposal were used to part-finance the cost of upgrading and refurbishment of Plaza VADS in Taman Tun Dr Ismail, Kuala Lumpur, another property owned by AHP, a REIT.

Choy said that while investment-grade properties are most sought-after, there is no need to buy expensive properties, or Grade A buildings, to get a reasonable yield of seven per cent.

"For instance, you can buy a property in Cyberjaya and still get a reasonable yield.

"It is also important that buildings are rebranded to upmarket category," he said.

He said one of the well-known office and commercial buildings in KL which has been extensively re-branded to upmarket brand is the Intermark, which is located at the junction of Jalan Tun Razak and Jalan Ampang.

It sets new standards in design and quality by integrating green technology and a lifestyle environment for work and leisure.

The project, which consists of Grade A office towers, an international hotel and retail podium, was a refurbishment of several buildings -- City Square, Empire Tower, Plaza Ampang and Crown Princess Hotel.

Choy said market rate of office space for premium Grade A office buildings in Kuala Lumpur is expected to be stable next year with market rate of between RM5 and RM7 per sq ft.

By Bernama

Selangor Prop Q4 profit grows to RM60m

Selangor Properties Bhd's pre-tax profit for the fourth quarter ended Oct 31, 2010 rose to RM59.843 million from RM45.017 million in the same quarter of 2009.

Revenue, however, fell to RM52.251 million from RM155.119 million previously.

For its fiscal year ended Oct 31, 2010, it recorded a higher pre-tax profit of RM71.787 million compared to RM61.558 million in 2009. Revenue fell to RM203.044 million from RM321.702 million previously.

In a filing to Bursa Malaysia today, the company said the increase in pre-tax profit was mainly due to contributions from property development, investment properties and education.

The group said prospect for the next financial year remained positive.

By Bernama

KPJ to inject assets into REIT

KPJ Healthcare Bhd is set to raise RM138.7 million by injecting three of its hospital buildings into a real estate investment trust (REIT) scheme called Al-'Aqar KPJ REIT.

KPJ managing director Datin Paduka Siti Sa'diah Sheikh Bakir said under the scheme, the healthcare group will in return get a combination of RM1.1 million in cash and the balance in new Al-'Aqar KPJ REIT units.

The exercise involves the sale of two hospital buildings here - the Bandar Baru Klang Specialist Hospital in Selangor and the Kluang Utama Specialist Hospital in Johor.

The third hospital is the Rumah Sakit Bumi Serpong Damai building in Jakarta, Indonesia.



To retain the use of the buildings, the group in turn will rent the buildings via a 15-year lease with an option to extend the tenure for another 15 years.
The asset injection will allow the group to unlock value and realise its investment in the properties, Siti Sa'adiah said.

Proceeds from the asset sales will be used to pare down the group's borrowings and trim the gearing to 0.4 times from 0.5 times and an interest cost-savings of about RM2.2 million a year.

"This will enable us to gain access into funds in our plans to build new hospitals next year such as in Pasir Gudang, Kuantan, Klang, Muar and in Sabah," she told reporters in Kuala Lumpur yesterday after Al-'Aqar KPJ REIT's annual shareholder meeting.

Al-'Aqar KPJ REIT is the first and largest Islamic healthcare REIT in Malaysia and managed by Damansara REIT managers Sdn Bhd, which is a member of the Johor Corp Group (JCorp).

The sale and leaseback of the three hospitals is the fourth tranche of the REIT's injection since its launch in 2006.

The first tranche involved the injection of six hospital buildings valued at RM481.2 million, the second involved the sale of five buildings for RM170.0 million and the third comprised seven hospital buildings and one nursing college for RM292.5 million.

With the injection, Al-'Aqar KPJ REIT's total enlarged units stands at 636.8 million units with a total of 22 hospital buildings under its scheme, one nursing college, the Selesa Hotel, Metropolis Tower and another two properties in Jakarta.

Upon completion of the proposed acquisitions, the enlarged total asset value will be more than RM1.2 billion.

Al-'Aqar KPJ REIT will seek listing and quotation for its consideration units of 56.6 million units on the Main Board of Bursa Securities.

By Business Times

Al-'Aqar KPJ REIT gets shareholders nod

Al-'Aqar KPJ REIT, the first and largest Islamic Healthcare REIT in Malaysia, has got the nod from its shareholders for proposed acquisitions at its Extraordinary General Meeting (EGM) today.

Al-'Aqar KPJ REIT has proposed to acquire the entire interest in Bandar Baru Klang Specialist Hospital Building in Klang, Kluang Utama Specialist Hospital Building, Kluang, Johor and Rumah Sakit Bumi Serpong Damai Building in Jakarta, Indonesia, from the subsidiaries of KPJ Healthcare Bhd.

This is in addition to the Rumah Sakit Medika Permata Hijau Building in Jakarta, Indonesia, from PT Khidmat Perawatan Jasa Medika, a subsidiary of Johor Corporation.

In a statement here today, the company said it has proposed to acquire the above properties for a total cash consideration of RM159.910 million to be satisfied partly by RM104.402 million cash and partly by the issuance of 56,641,000 new units in Al-'Aqar KPJ REIT at an issue price of RM0.98 per unit.

Al-'Aqar KPJ REIT will seek listing of and quotation for its consideration units of 56,641,000 on the Main Board of Bursa Securities.

It said this will bring the total enlarged unit capital of the Al-'Aqar KPJ REIT after the proposed acquisitions to 636,808,000 units and also from the existing 18 hospital to 22 hospital buildings, one nursing college and also the Selesa Hotel and Metropolis Tower.

It also brings the total number of properties to 24 - 22 in Malaysia and two in Jakarta. The proposed acquisition is expected to be accretive to Al-'Aqar KPJ REIT''s distributable income going forward.

Upon completion of the proposed acquisitions, the enlarged total asset value will be approximately more than RM1.2 billion.

By Bernama

YTL to sell and lease back properties

YTL Corp Bhd is selling four properties to Starhill Real Estate Investment Trust (REIT) for RM472 million and leasing them back.

The properties are Cameron Highlands Resort, Hilton Niseko in Japan, Vistana Penang and Vistana Kuala Lumpur, the group said yesterday.

Apart from RM100 million cash payment, Starhill Global Real Estate Investment Trust will also issue convertible preference units at S$1 (S$1 = RM2.40) per unit.

Upon conversion of convertible preference units into Starhill Global REIT, YTL Corp's stake in the Singapore exchange-listed REIT will increase.

By Business Times

YTL to sell properties to Starhill REIT

YTL Corp Bhd, via its units, will dispose of four of its hospitality-related properties to Starhill Global Real Estate Investment Trust (Starhill REIT) for RM472 million.

In a filing to Bursa Malaysia today, it said the properties were Cameron Highlands Resort, Hilton Niseko, Vistana Penang and Vistana Kuala Lumpur.

YTL said it had entered into four separate sale agreements for the disposal via its direct and indirect units, namely, YTL Land Sdn Bhd, Niseko Village K.K, Business & Budget Hotels (Penang) Sdn Bhd, and Prisma Tulin Sdn Bhd.

"The disposals will enable the group to unlock and realise the fair value of the properties," it said. It said Starhill would lease the properties for an initial lease period of 15 years, and an option to renew for a further term of 15 years.

YTL said the cash proceeds from the disposal would be used entirely by its units for repayment of bank borrowings, payment of cumulative preference share dividends, redemption of preference shares, payment of special dividends, and general working capital purposes.

By Bernama