Mideast confidence in Bukit Kiara Properties

PETALING JAYA: The UAE-based Al Batha group, which invested RM42mil in a joint venture with Malaysia’s unlisted Bukit Kiara Properties group, highlights Middle-east companies’ interest in well-managed Malaysian companies.

However, the relationship between the diversified Al Batha group and Bukit Kiara group went beyond profits and it was built on common values, ethics and integrity.

Bukit Kiara Properties Sdn Bhd managing director Tong Nguen Khoong said three years ago, a representative of Al Batha group expressed interest in the properties built by the company.

This saw the Al Batha group, which is involved from automobiles, manufacturing, electronics and real estate, buying a few properties in Bukit Kiara’s Hijauan Kiara apartments.

This was followed by purchases in its first and second tower of the Verve Suites over the past 18 months.

“During this period, both companies got to know each other better,” he said, as both parties took cognisance of each other’s common values, ethics and integrity.

Tong said he remembered a conversation he had with Al Batha vice chairman Sheik Salem bin Mohammed Al Qassimi when Al Batha expressed interest in co-developing Bukit Kiara’s second tower of the Verve Suites.

He remarked to Sheik Salem that Al Batha would be better off as an investor in the project than as a co-developer because “our profit margins are very reasonable and we offer good value to our customers”.

He also recalled Sheikh Salem’s reply that making a reasonable profit but not exorbitant profit was good. This viewpoint was also consistent with Bukit Kiara group’s values.

“Later, this became the catalyst for discussion of investing into the Bukit Kiara group at the holding level,” he said.

Tong said with Al Batha group at the holding level was better instead of being co-investor on a project-by-project basis which would be too ad-hoc.

This led to the formation of the JV company - Al Batha Bukit Kiara Holdings Sdn Bhd (ABBK).

The JV, formalised in Dubai on Oct 20, would see Bukit Kiara group injecting properties with a gross development value of RM700mil.

The JV would provide Al Batha group a foothold into the global market where it intends to have its operations or JVs with overseas companies.

Tong said the paid-up capital of ABBK would be increased to RM105mil, following the injection of RM42mil for the 40% stake in ABBK.

Before Bukit Kiara group started discussions with the Al Batha group, an insurance company had earlier expressed interest to team up with the former.

“However, the insurance company’s focus was on returns in investments only, while we wanted to look at a longer-term partnership,” Tong added.

For the Bukit Kiara group, it has an opportunity to learn from the Al Batha group in the area of long-term growth as it is a huge conglomerate, he said.

“The future for the group is very bright and opens up the possibility of new growth areas to attract Middle-east investors. In the past, investors gave Malaysia a miss because of its small size,” he said.

Tong said once the critical mass was built up, Malaysians could expect to attract more foreign interest, especially from the Middle-east.

“We are looking at a 10 to 15 year horizon. The Middle-east market will create opportunities for Malaysians to venture out,” he added.
By The Star (by Joseph Chin)