Foreign listing option

By New Straits Times

SUNWAY City Bhd (SunCity), which plans to float a RM3 billion real estate investment trust (REIT) - the country's largest REIT - next year, is looking at alternative exchanges for the listing, sources say.

Business Times was told that Sun-City is also considering the Singapore Stock Exchange as a possible venue for better returns.

"Malaysia is priority for Sunway Group to list its REIT ... but it does not offer much incentives for the listing of REITs," one industry source said.

"SunCity is open to listing recommendations made by the houses so as to obtain better returns for investors, he said.

SunCity officials could not be reached for comment.

It is believed that one of the hindrances is the tax structure.

"In Singapore, the withholding tax for foreign investment is 10 per cent. In Malaysia, the tax is 20 per cent," the source said, adding that this could be one of the reasons why SunCity may opt to list its REIT abroad.

In a recent interview with Business Times, SunCity's managing director of property investment Ngeow Voon Yean said that the group was looking to float the trust next year and that investment bankers were working on the components that will form part of the REIT.

News of SunCity's plans to unlock its value and raise funds for major projects through a REIT began as early as January 2005.

SunCity's plans had included the injection of two of its shopping complexes into the REIT - Sunway Carnival and the newly-expanded Sunway Pyramid.

The former opened in June and the expanded wing late last month.

Some of the properties, apart from the shopping complexes that have been identified to be injected into the REIT, include the Sunway Lagoon Resort Hotel and the Pyramid Tower, Menara Sunway, Monash University and its hostels.

Properties that are likely to be injected at a later stage include the recently acquired 27-storey RM170 million Wisma Denmark, Sunway Medical Centre (which is undergoing expansion), proposed KL South shopping mall in Cheras, and four office towers in Bandar Sunway that the group has proposed to build.