CapitaLand pays $250m for KL mall stake

CapitaLand pays $250m for KL mall stake

 

SINGAPORE’S CapitaLand is now the new majority owner of Kuala Lumpur mall Sungei Wang Plaza, after it paid RM595 million (S$250 million) for a 61.9 per cent stake in the mall.

The 31-year-old property in downtown Kuala Lumpur is the third in a pipeline of assets intended to form part of a pure-play CapitaLand Malaysian real estate investment trust (Reit) investing in retail malls.

 

The Singapore property giant announced plans for the Reit in August last year, when it bought the first two assets – Gurney Plaza, one of Penang’s top retail malls for $336.8 million, and Mines Shopping Fair in Selangor for $190.3 million.

 

Back then, CapitaLand said it intended to launch the Reit within a year, that is, by August this year.

 

The proposed Reit now has about RM2 billion, or $840 million, worth of assets, after enhancement works done on the first two complexes resulted in an increase in their valuations.

 

CapitaLand has not stated how large the Reit will be by the time it hits the market, but if it was listed in Malaysia now, it would be the country’s largest.

 

The next biggest, YTL Corp’s Starhill Reit, listed on Bursa Malaysia in 2005, has an asset size of about RM1.3 billion.

 

CapitaLand is currently exploring either a Singapore or Malaysian listing, said a company spokesman.

 

It is ‘firmly on track’ to list by the end of this year, said Mr Pua Seck Guan, the chief executive of CapitaLand Retail.

 

‘Through our proactive management and by leveraging on our retail real estate management expertise, there are tenancy remixing opportunities to create significant value at Sungei Wang,’ he added.

 

The 11-storey shopping mall is located within the Bukit Bintang shopping district in Kuala Lumpur’s city centre. It has 800 retail outlets spread over 824,000 sq ft, with close to 100 per cent occupancy. There are more than 1,300 carpark lots.

 

By ‘tenancy remixing opportunities’, the company means it would, for example, look at existing tenants to see how they fit into the mall, and possibly bring in new brands, said a spokesman.

 

Sources said there are plans to refurbish the mall as CapitaLand did with the other two, but that is not its main focus for now as it prepares to launch the Reit later this year.

 

To date, CapitaLand has sponsored five Reits, of which four are listed on the Singapore Exchange and one on Bursa Malaysia – Quill Capita Trust, launched in January last year, comprising four office buildings.

 

Shares of CapitaLand fell three cents to $5.72, on 13.3 million units done. The stock has fallen 8.8 per cent so far this year.

 

 

 

——————————————————————————–

 

 

GROWING FAST

 

CapitaLand’s proposed Malaysian retail Reit now has about RM2 billion, or $840 million, worth of assets.

 

KEY PLAYER

 

The property giant has so far sponsored five Reits, of which four are listed on the SGX and one on Bursa Malaysia – Quill Capita Trust, launched in January last year.

 

Source: Straits Times

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