Real estate sector still has upside despite downturn

REAL estate investors should look at the positive side during the current economic uncertainty, as there is still some upside in this sector, says MGPA Asia Developments chief executive officer Michael Wilkinson.


Michael Wilkinson (left) and MGPA Asia Developments managing director Moon Duck Kim posing with the replica of The Intermark

“Construction cost is now at a moderate rate and with careful selection of investment, we can still benefit,” he said during the launch of The Intermark, a fully integrated world class mixed-use development, yesterday. MGPA will invest RM2bil (including acquisition and construction costs) in The Intermark.

The amount involves the complete refurbishment of 62-storey landmark grade A office building Vista Tower (formerly known as Empire Tower), a new international grade A office building Integra Tower, retail centre Intermark Mall (formerly known as City Square) and Malaysia’s first Doubletree by Hilton Hotel.

MGPA - through it’s Asia Fund 2 - acquired the Empire Tower, City Square, the Crown Princess Hotel and Plaza Ampang in 2007 for about RM760mil.

Wilkinson says the reason to refurbish and build the grade A office buildings was because such buildings were limited in the city.

“Besides that, the location of the development - at the junction of Jalan Tun Razak and Jalan Ampang - is very strategic, just 500 metres from the Petronas Twin Towers and also about a two-minute walk to the Ampang Park LRT,” he says.

The company is comfortable with the investment in Malaysia and will be here for a long time, he says, adding: “In fact, we are looking for more investment opportunities in Malaysia and will announce that when the time comes.”

He says Malaysia was fortunate to be still resilient in the current climate and, with a strong market, the country was still attractive to investors.

Vista Tower is expected to be completed by year-end while the Intermark Mall and DoubleTree by Hilton Hotel will be completed in the first quarter next year. The other building, Integra Tower, is scheduled for completion by end-2012.

By The Star (by EDY Sarif)